Is a Detached Garage Covered Under Homeowners Insurance?

Homeowners insurance protects your home, your most significant asset. This coverage extends beyond the main dwelling to include other structures on your property, addressing various potential damages. Understanding how these policies apply to detached structures, such as a garage, is important for comprehensive property protection. This article explains typical coverage for detached garages and explores scenarios where additional protection might be beneficial.

Standard Coverage for Detached Structures

A standard homeowners insurance policy typically includes coverage for structures not attached to your main home. This specific coverage is commonly referred to as “Other Structures” coverage, or Coverage B. It encompasses various separate buildings on your property, including detached garages, sheds, fences, and gazebos.

This coverage usually protects against the same perils as your primary dwelling. Common covered risks often include fire, windstorms, hail, theft, vandalism, and damage from vehicles or falling objects. For example, if a detached garage is damaged by fire or a tree falling during a storm, “Other Structures” coverage would apply.

Understanding Coverage Limits and Exclusions

The financial protection for detached structures is typically a percentage of your dwelling coverage, which is the amount your home is insured for. This percentage commonly ranges from 10% to 20% of your main dwelling’s coverage limit. For instance, if your home is insured for $300,000, your detached garage and other structures might be covered up to $30,000 to $60,000.

However, several exclusions commonly apply to detached structures. Policies generally do not cover damage from earth movement, such as earthquakes, or from floods, requiring separate specialized policies for these perils. Additionally, general wear and tear, neglect, or damage from insects and vermin are typically excluded from coverage. A significant exclusion applies if the detached structure is used for business purposes or rented out to someone not residing in the main dwelling, as standard homeowners coverage often becomes void.

When Standard Coverage May Not Be Enough

The typical 10% to 20% coverage limit for detached structures might be insufficient in several situations. If a detached garage houses high-value contents, such as classic cars, specialized tools, or recreational vehicles, their combined worth could easily exceed this standard limit. While personal property coverage generally covers items stored in a detached garage, high-value items may have specific sub-limits.

Using the detached garage for a home-based business often voids standard coverage for business-related losses. This exclusion applies even if only a portion of the structure is used for business. Similarly, if the detached garage is rented out as a separate dwelling or for storage, standard homeowners insurance typically does not cover risks associated with tenants or rental income. Lastly, if the detached garage itself is unusually large, custom-built, or features expensive amenities, its replacement cost may surpass the standard percentage allocation, leading to underinsurance.

Options for Enhanced Protection

Homeowners have several options to ensure adequate protection for their detached garages. A common method is to increase the “Other Structures” coverage limit by adding an endorsement to the policy. This allows homeowners to raise the percentage of coverage beyond the standard limits to match the replacement cost of their structures.

For high-value personal property stored within the garage, a scheduled personal property endorsement can be added to the policy. This involves specifically listing valuable items individually for their appraised value, ensuring they are fully covered. If the detached garage is used for business, a separate business insurance policy, such as a Business Owner’s Policy (BOP) or commercial property insurance, is generally necessary. These policies cover business operations, liability, and equipment within the structure. If the garage is rented out as a dwelling, a specific landlord policy or dwelling fire policy is needed to cover rental risks and potential loss of rental income. Consult with an insurance agent to discuss specific needs and explore available options.