Home insurance is essential for Canadian homeowners, providing coverage against risks in case of damage or loss to their main dwelling and personal belongings. But where do detached structures like garages fall in terms of coverage? Does it make a difference if your garage is attached to your home?
Home Insurance and Garage Damage Coverage at a Glance
- Coverage for detached structures protects the structure itself, but it does not cover personal property stored within those structures. Homeowners should ensure they have adequate personal property limits to cover valuable items stored in their detached garages.
- If you use your garage for any business activities, inform your insurer ASAP and consider getting additional liability coverage or a separate business insurance policy if necessary.
- Life changes like home renovations or building detached structures on your property can affect your insurance needs. Routinely reviewing and updating your policy ensures you maintain adequate protection over time.
Learn more about how home insurance covers garages and other detached structures. In this article, we’ll explain how to determine the right amount of coverage for your garage, how business activities affect your garage’s coverage, and how often you should review your policy’s detached structure coverage.
What Are Detached Structures?
Detached structures are any permanent buildings on your property that are not physically attached to your main residence. While these structures all serve different purposes for your household, they also pose potential liabilities and risks. Examples of detached structures include:
- Gazebos
- Tool sheds
- Pool houses
- Fences
- Detached garages
Are Detached Structures Covered by My Home Insurance?
While home insurance offers substantial protection against theft and In most cases, detached structures are covered by standard home insurance policies in Canada. A home insurance policy protects detached structures against the same risks covered for the main dwelling.
However, the extent to which a detached structure is covered is affected by these factors:
Policy exclusions:
Homeowners should be aware that certain types of damage may not be covered under standard policies. For example, damages resulting from neglect or lack of maintenance may not be compensated.
Type of home insurance policy in place:
There are three main types of home insurance coverage – basic (for specific perils only), comprehensive (covers all perils except those specifically excluded), and broad (gives comprehensive coverage for your home and structures but basic coverage for belongings). Depending on which type you have, you may need additional endorsements to avoid coverage gaps for your detached structures.
Coverage limits:
The amount of coverage for detached structures usually represents a percentage of your total dwelling coverage – typically 10% to 15%. So for example, if your home is insured for $500,000, your detached structures would be covered up to $50,000. Check your policy to see if this percentage is sufficient for your needs.
Does Homeowners Insurance Cover Garage Door Damage by Your Car?
If you damage your garage door with your car, coverage for the damage will depend on whether the garage is attached to your home or a detached structure. Damage to a garage door is generally covered under homeowners insurance if the door is attached to the home, as it will be considered part of the home itself.
Detached garages, however, may fall under an “other structures” clause in your policy and have a lower coverage limit. Consider increasing your detached garage’s coverage through a separate endorsement, especially if it has unique features or high-value items.
How Does Working in My Garage Affect My Coverage?
Many homeowners use their garages not just for storing their cars, but as workshops or hobby spaces. If you’re using your garage for business-related activities, this can significantly impact your home insurance coverage. These are important considerations when using your garage for business activities:
Increased risk for insurers:
Operating a business may increase the risk associated with your garage due to higher foot traffic or specialized equipment. Insurers may require additional coverage or even a separate business policy.
Potential cancellation of policy:
Whether it’s a full-blown repair shop or a small crafting table, running a business from your garage without informing your insurer could void your home insurance policy.
Liability concerns:
If someone were injured while visiting your garage for business purposes, you could face liability claims that might exceed standard homeowner’s coverage limits. Consider getting garage liability insurance policy or even a separate home-owned business policy to keep you covered.
How Do I Determine The Right Amount of Coverage for My Garage?
To determine the right amount of coverage for your garage insurance, you need to consider different factors such as your type of garage and its contents. Here’s what you need to keep in mind to help you assess your coverage needs for your garage more effectively:
Assess the value of your garage and its contents:
Calculate how much it would cost to rebuild your garage in case of a total loss – this figure should include materials and labour costs. You should also take an inventory of items stored in the garage and estimate their replacement value, as high-value items may need added coverage or riders.
Review your homeowners policy:
Check the limits for both dwelling and other structures coverage. Make sure your personal property limits are enough to also cover items stored in your garage.
Consider additional risks in your area:
If you live in an area with a higher crime rate or severe weather conditions, homeowners insurance may not sufficiently cover these events for a detached garage. Additional policies may be necessary to protect against these risks.
How Often Should I Review My Home Insurance Policy for Detached Structures?
To ensure that your detached structures are adequately covered under your home insurance policy, it’s advisable to review your policy at least once a year. Additionally, you should consider reviewing it whenever significant changes occur. Here are key events that should make you review your policy:
If you add any new detached structures, such as a shed, gazebo, or pool, update your policy to reflect these additions. This ensures they are covered under your home insurance.
Major renovations such as upgrading your garage or building additional structures should prompt a coverage review. You may want to check if these improvements require an increase in your coverage limits.
If the value of the items stored in your detached structures increases significantly (e.g., expensive tools or equipment), consider increasing your personal property coverage or scheduling those items for higher protection.
Events such as marriage, divorce, or family members moving in or out can affect the overall value of possessions in your home and detached structures.
Key Advice from MyChoice
- Keep an updated inventory of items stored in your garage along with photographs and receipts for high-value items. This will facilitate easier and faster claims processing if needed.
- If you live in an area prone to natural disasters like floods or fires, standard homeowners insurance may not provide enough coverage for your detached structures. You may need an additional policy for them, especially if they’ve been upgraded.
- When filing a claim, consider that your homeowners policy may have a deductible that could exceed the repair costs. This means it might not be worth filing a claim if the repair cost is lower than the deductible.