With the cost of homeowners insurance skyrocketing every month in Texas, it is not uncommon for good folks like Armando to begin to look at their homeowners policy line item by line item. Unfortunately, there are a lot of terms in a standard home insurance policy that don't make a lot of sense to your average Texan because the jargon is confusing! One of the line items that almost always comes up in our conversations with Texans, and Armando was no different. He wanted to know what Separate Structures was and why the home insurance company thought he had $32,500 of it. Fortunately, the agents at Insurance For Texans have a great answer to this question!
When looking at the declarations page of any Texas Homeowners Insurance policy the first line item that you will see is for the dwelling coverage limit. The dwelling limit is the amount of money that is estimated to rebuild your home in the event of a total loss. The next line item below that on the declaration page is almost always separate Structures, or sometimes written as Other Structures. People understand the need to rebuild or repair their house, but what is a separate structure anyway?
Home Insurance policies at their core rebuild the home that you live in if something happens. But as our properties become more complex, some of the detached structures on your property are not connected to your main home. What if you have a detached garage that is not built into that main home? What if you have a barn in that back for animals? What if you have that small shop where you woodwork or work on your lawnmower in the backyard? These items, since they are not a part of your main home, would not be covered by the dwelling amount on your home insurance policy. These are examples that insurance providers considered separate structures and therefore covered by that line item. This helped Armando understand what this type of coverage is for, but his questions were not done.
Do I Have Enough Separate Structure Coverage?
On a standard Ft Worth Home Insurance Policy you will find a line item for separate structures that is typically defaulted to 10% of your dwelling coverage. This means if your home's dwelling coverage limit is $300,000, you would have $30,000 available to as your separate structures coverage limit. In most cases, this coverage can be modified to meet your needs if you have a guest house or pool house beside that swimming pool in the backyard. Or maybe your barn in the back of your property outside of Waco is worth more than that $30,000 since it has electrical and plumbing in it. In these cases, we can increase beyond the 10% standard amount to make sure that you have adequate coverage and can rebuild those detached structures.
It's important to understand the reconstruction value of those items on your property. so that you can make an educated attempt at proper additional structures coverage. Many Texas homeowners underestimate how much money is needed for true replacement cost coverage on these additional structures. This is where working with an experienced insurance agent can make all of the difference in the world to you.
I Don't Have A Shop, Barn, or Extra Garage Though
The next question that came from Armando during our conversation was almost as common as his first question of what is separate structures coverage. And that question is can I remove it because I don't have any of those things. So we asked some deeper questions. The coverage for separate structures can become complicated when we begin looking at what exactly is and is not included in this coverage. The general rule of thumb is that if you have structures on your property that do not share a common roof line with your main dwelling, then the item falls to separate structures. Fences and Pergolas (or other similar type items) can become confusing.
The fence is attached to your home. The Pergola is secured to your home. Shouldn't they be covered by the dwelling amount? Most adjusters come claim time, will allocate those items to the separate structures. If your detached garage is connected to your main home by a breezeway with a roof line, you will allocate that to the dwelling amount though. And finally, if you have a pool you will actually be able to use the separate structure coverage for resurfacing the pool if it is sucked off by a tornado or other major event. Most Texans have no idea of that wacky bonus point on this coverage.
But back to the question of can this automatic coverage be removed or reduced if you believe the separate structures coverage percentage to be too large for your specific situation. Most insurance carriers tell us no on a typical home insurance policy that is sold in Texas. There are some that will allow for a reduction from 10% to 5% of the dwelling insurance amount, but removing it completely from your insurance coverage is typically not an option with your standard homeowners policy.
What Else Should I Know?
While we understand that you might not have anything to be covered by separate structures coverage, attempting to remove this coverage amount will not change the average cost of your standard policy. It's also important to realize that you could be left without coverage for items that you might add later on to your home or property. Once Texans move into their "dream" home they end up making additions and changes to it. You don't want to be caught looking for a claim payout that doesn't exist because you tried to remove a standard coverage.
The other big item is that in some instances, items like fences will have their claim settled as actual cash value coverage rather than replacement cost. Make sure that you ask questions and understand which you have when looking at the automatic coverage that is provided by your current homeowners insurance policy. Making sure that the extra layer of protection that replacement cost brings will provide that financial protection if you have damage to structures that are not attached to your Texas home.
Our goal at Insurance For Texans is to make sure that you understand your Texas Home Insurance Policy. We do that through True Texas Home Insurance. That standard allows us to provide a predictable value from your homeowners policy no matter which company that we recommend to Texans like Armando or yourself. You get proper coverage with the customization that you deserve.
As a local, independent insurance agency we work for you, the residents of Texas rather than some big insurance company. Our goal is to make sure that you understand what you have for coverage today, how we can close gaps, and focus on customizing a home insurance plan to meet your real needs.
Call us at 469.789.0220 or click the button below to get TRUE Texas Home Insurance Today.