Sheds come in all shapes and sizes. Your shed might be home your lawnmower or a tiny writer’s studio. The tiny structures are blank canvases that can easily turn into whatever you need them to be.
That being said, do sheds fall under the dwelling coverage section of your insurance policy? And, more importantly, do you know when a homeowners policy would payout for a damaged or broken shed? Here’s what you need to know.
Are sheds protected by dwelling coverage?
No, sheds aren’t protected by dwelling coverage because they are separated from your main dwelling (your home) by a clear space. Sheds are classified as “additional structures” and therefore fall under the other structures coverage, or Coverage B, of your homeowners insurance policy.
Other structures coverage commonly protects detached structures like:
- Detached garages or carports
- Guest houses
- In-ground swimming pools
When would my insurance company cover a damaged shed?
Your insurance company would cover a broken shed if it was destroyed by a covered peril on your policy. Covered perils are usually limited to unpredictable and unavoidable occurrences, such as criminal activity, inclement weather, and fires.
That being said, if a tornado damaged your shed and the personal property within it, it would likely be covered under a standard policy (up to the coverage limit).
However, it’s important to remember that the other structures portion of your home insurance often only qualifies for 10% of the coverage of the total limits of the policy.
That means, if you use your shed to store expensive equipment or if its value is inflated for another reason, you should contact your insurance agent and inquire about getting additional coverage beyond a standard homeowners insurance policy.
When you are looking at insurance policies, you have to decide between purchasing replacement cost or actual cash value cost.
Replacement cost: Replacement cost will replace your damaged or broken external structure with a brand new model (equivalent to the one you lost), even if the price for the item or structure has increased since you purchased it.
Actual cash value cost: Actual cash value cost takes depreciation into account. You will be reimbursed for the amount your shed was worth when it became damaged.
When would my insurance company not cover a damaged shed?
Your insurance company would not cover damage to your shed or the items within, if it was damaged by a peril that isn’t listed on your policy.
Normal wear and tear is notably not included in standard policies. That means, if your shed is reaching the end of its useful life, and the door falls off, you will be responsible for the repair or replacement costs.
It’s always a good idea to double-check your policy to make sure you have the proper coverage. Standard policies often exclude floods and earthquakes from their covered perils. If you live in an area prone to these occurrences, it’s advisable that you purchase additional coverage.