Outbuilding Insurance Coverage

What is outbuilding insurance?

Outbuilding insurance is protection for private structures detached from your home. Outbuildings can include sheds, garages, pools, decks, and more. Outbuilding insurance is part of your home insurance, and limited coverage is included in your residential policy. In insurance terminology, outbuilding insurance is part of Coverage B of a home policy. There are situations, however, when you may need more coverage for outbuildings than what is provided in a standard home policy. Speaking with an insurance broker is the best bet to determine the right outbuilding insurance for your individual situation.

What is considered an outbuilding?

An outbuilding is a detached private structure on your property. Common structures that are considered outbuildings include sheds, garages, pools, pool houses, fences, gazebos, greenhouses, decks, storage buildings, guest houses, granny flats, boathouses, and more. Outbuilding insurance can protect these.

Should I insure my shed or outbuilding?

Yes, you should insure your detached structures, including sheds. You likely store items in these outdoor structures such as a lawnmower, bicycle, or patio furniture, so in the event of a loss, you will want to ensure your contents are protected. In most cases, you do not need a stand-alone policy to insure your outdoor structures because outbuilding insurance is provided under Coverage B, the detached private structures portion, of your home policy.

Does my home insurance cover outbuildings?

Yes, your home policy does include outbuilding insurance under Coverage B, the detached structures portion of your homeowner policy. Coverages provided in Coverage B differ among insurance providers. Coverage is usually limited to 10%-20% of the insurance on the main dwelling. Suppose your residence is insured for $750,000; your outbuilding insurance will typically be limited to $75,000 to $150,000. It is important to speak with an insurance broker who will help determine if you have the right amount of outbuilding coverage.

What kinds of outbuilding coverages are included in my homeowner's policy?

Detached structures on standard home insurance policies are covered for the same losses and perils as your residence. The insured risks are fire, theft, lightning, explosion, smoke, falling objects, aircraft or land vehicle impact, riot, burglary and robbery, vandalism or malicious acts, water damage, wind storm or hail, and more. Some of the more common claims involving detached structures are for damage due to fire, falling objects such as trees, water damage, and wind or hail storm damage.

Depending on your situation, a standard home policy may provide adequate outbuilding insurance. To be sure, we recommend speaking to a broker about your unattached structures and the type of outbuilding insurance you require. Outbuilding insurance is not one-size-fits-all. Details like the structure's size, type and use will determine your outbuilding insurance needs.

What types of outbuilding coverages are excluded from my homeowner's policy?

In terms of outbuilding insurance coverage, several factors determine what type of outbuilding insurance you need to be appropriately protected.

Suppose you live on a large property with multiple detached farm outbuildings such as barns, stables, granaries, and other similar farm structures. In this case, a homeowner policy will not provide sufficient outbuilding insurance for your farm outbuildings. We recommend you look into additional insurance or a policy specific to the building's use(s), such as a farm insurance policy or a commercial policy. If you operate a home-based business in an outbuilding, we recommend speaking to a broker about the details of your business to determine what insurance is best. An insurance broker can provide expert advice to ensure you have the proper outbuilding insurance.

Does outbuilding insurance cover business use?

There are different types of insurance for personal, and business uses. Discussing outbuilding insurance and your business with your insurance broker is essential if you operate a business from your garage or another detached structure on your residential property. All insurance companies are different; however, many can add an endorsement to your home policy that will cover business-in-the-home uses. Most insurance companies have a 'list' of operations permitted to be covered under a residential policy. Suppose your business cannot be insured through home-based business coverage. In that case, an insurance broker can get you several commercial insurance quotes to ensure you and your business are adequately protected. Speaking to an insurance broker is highly recommended to ensure you have the proper outbuilding insurance.

Does outbuilding insurance provide coverage for contents including expensive cars, tools, and equipment? 

Always speak to your broker about the use of your outbuildings, including what is stored inside, such as expensive cars, outdoor equipment, garden tools, power tools, or other expensive items. Predicting when you may have a loss is impossible, but you can be prepared with adequate outbuilding insurance.

Be sure to keep an inventory of your belongings that live in your outbuilding(s). In the event of a claim, you may be asked for a list of damaged or lost items. If you have an inventory of your items, you will have a readily-accessible and accurate list. This can make a claim involving your outbuilding insurance move ahead more smoothly and promptly. Your inventory may be a written list, photos or a video. This information will be helpful in case of a claim on your outbuilding insurance.

Some helpful outbuilding insurance tips:

• Keep your receipts - as much as possible - for expensive tools and equipment you store in your detached buildings. This can be very helpful in a claim involving your outbuilding insurance.
• If you think you need more outbuilding insurance than what is available on a standard dwelling/residential policy, speak to your broker about scheduling higher-value items or other coverage options. This will help ensure you are adequately insured in the event of a loss involving your outbuilding insurance.
• If you have an expensive vehicle or vehicles stored in your detached garage or other separate building, talk to your broker about how to properly insure these vehicles. You may be able to add these to your current existing automobile policy. If you are storing your classic or vintage cars in a detached structure, your broker can get you several quotes from insurance companies that specialize in insuring these types of vehicles.

Do standard coverage limits apply to outbuildings?

Most policies have standard coverage limits that apply to outbuildings. An insurance broker can check to see what your current insurance company provides for outbuilding insurance limits. The broker can also help you determine if you should schedule an item(s) on your policy for extra outbuilding insurance. Scheduling an item means you can protect it to the actual value. Insurance companies charge an additional cost to increase standard limits or schedule items; however, both are good protection in the event of a claim. Suppose you have many expensive tools in your shed. Without extra outbuilding insurance coverage, you will be covered only to the standard limit - perhaps far less than the value of the tools. If you scheduled the tools or increased the limits, your outbuilding insurance will provide improved coverage for your tools. Contact your broker to see if your insurance company offers higher limits or if you should schedule specific items for proper outbuilding insurance.

Should I let my broker know if I have installed a new shed or built a new detached structure?

Yes, it is very important that you let your insurance broker know if you install a new shed or build a new detached structure on your property. You may need to make updates to your insurance policy to ensure you are properly protected. Some of the information that your broker will need to know about your new detached structure include: 

• The type and size of the outbuilding: The type and size of detached buildings are important when it comes to outbuilding insurance because most insurance companies will only insure outbuildings for up to 10% to 20% of the main dwellings insurance limit. Advising your broker of the type and size can help determine if you have the right coverage for that structure.
• The use of the outbuilding: Let your broker know the use of the detached structure. For example, is it used for storage, as a shop, for pleasure or business, as a rental unit or for another use? Providing your insurance broker with these details helps them ensure you have the appropriate outbuilding insurance.
• Contents inside the outbuilding: Keep an inventory - written, photos or video - of what you have stored in a detached building. Detached structures are typically easier to access and break into, which means they may be at greater risk of theft. Knowing what is inside the structure can be helpful if you have a loss and make a claim. We also recommend that you check that any hazardous items are stored safely and appropriately.

What are the most effective ways to keep sheds and outbuildings secure?

Thieves may target buildings where they hope to find valuable and easily portable items such as tools, bikes, mowers, garden furniture, barbecues, sporting goods, golf gear, or other items. Good security can reduce the chances of suffering a loss and making a claim on your outbuilding insurance. Maintaining a claims-free history helps to keep your insurance costs down. There are several steps you can take to make your detached structures secure. Here are some suggestions:

• Lock it up. A solid padlock or similar lock of your preference can keep thieves at bay. Multi-point locking systems are also a reliable option. You may also want to lock up valuable items inside the outbuilding in a locker or with additional locks.
• Keep the building well lit. Motion-detection lighting is a good deterrent as most thieves do not want to be in a well-lit area.
• Install security cameras. Cameras can be a good deterrent. Thieves will likely think twice if they see a building has cameras. In the event of a claim, cameras can also provide good evidence for police and others.
• Install an alarm. The goal is to create noise to scare thieves away and alert you and others of a possible break-in.
• Keep valuables out of sight. If there are windows in the outbuilding, you may want to cover valuable items, so they are not visible.
• Install prickly bushes or plants. This may sound silly at first, but it can help stop break-ins and thefts. Plant bushes that are attractive but not particularly pleasant to be next to - think prickly, scratchy, thorny, like raspberry brambles.
• Locking gates. Depending on the layout of your property and whether you have a fence, locking gates can also reduce the likelihood of theft.
• Secure your structure's foundation. This is a weather security tip. It can be helpful to secure your structure to its foundation in case of adverse weather such as wind storms.
• Secure your gazebo or similar items. This is another weather-related tip. If you have a gazebo, you may want to secure it with ropes and anchors in case of high winds and other bad weather. Greater security and reduced risks of a loss and a claim on your outbuilding insurance. Fewer claims can help keep your insurance costs lower.

Where can I get outbuilding insurance coverage?

You can get outbuilding insurance and advice from our insurance experts at Morison Insurance. We are trained and licensed professionals who know all types of insurance, including outbuilding insurance. Our focus is getting outbuilding insurance that's right for you at a competitive price. We get quotes from numerous Canadian insurers to provide coverage options and prices for you. To get in touch with one of our expert brokers, fill out the form on our website or call 1-800-463-8074. We look forward to speaking with you. 

This content is written by our Morison Insurance team. It is provided for general information only. Insurance needs differ from person to person, and this article is therefore not a substitute for professional advice about your individual insurance needs which can be obtained by speaking to one of our brokers.