From first glance, insurance is a confusing concept. Each policy holds its own set of rules and
coverage language. Different agencies define terms differently, including structures,
something you should definitely be aware of. Keep reading to discover what your insurance
agency may mean when they talk about structures.
So What Is A Structure?
Many insurance agencies define structures differently, but in general, they are Separate
Structures from your dwelling. Typically entirely separate from your home, other structures
can include a swimming pool, tool shed, or even specific objects that sole maintain your
premises can be a structure.
Claims can be handled entirely different between a structure and a dwelling, it’s important to
know exactly what those difference are and if there is a solution to those differences. From
the tools in your shed to a fence blown over by the wind, objects throughout your property
can be insured for different perils or causes. It’s important to know how these structures are
covered including what rules apply to that structure for coverage.
Dwelling Vs. Structure
Dwelling coverage usually gets whats known as “Open Peril” or Comprehensive coverage
which simply put means you have the broadest coverage for causation only limited by what
the policy specifically excludes such as normal wear and tear, acts of War, Settling, Flood Etc.
Separate Structures sometimes referred to as “Other Structures” is often limited to “Broad
Form” Perils which means you are only covered for what they list as being covered and
nothing more. Also beware, most separate structure claims are settled at “actual cash value”
instead of replacement cost
Replacement Costs Vs. Actual Cash Value
The insurance industry is full of vague terms, replacement costs being one of them. Typically
defined as the amount it would cost to rebuild your property in today’s market, not including
the land your property sits on. Replacement cost whether it would be defined under Building,
Structure or Contents, is designed to replace with Like kind and quality. Actual Cash Value on
the other hand takes in to consideration Age, Wear and Tear and Depreciation into the
mathematical equation. Also Known as “ACV”, actual cash value losses will be calculated
using Replacement cost less Depreciation for Age, Wear and Tear Etc. making the coverage
look and feel more like Market Value. It’s important to understand the differences in these
settlement options as they may apply to your situation
Companies use these coverages differently including insurance to value rules when offering
you coverage, therefore it’s important to discuss with your agent exactly what structures are
included, as well as what causation or perils apply. Buying easier or quicker online may not be
your best option for the price? If they can get you to pay the same or more for a whole lot
less they will.
You don’t have to navigate the big world of homeowners insurance alone. Allow Adkins
Insurance to work with you to identify your specific needs. We save you money by only
insuring what you need and by having the right coverage at the time of loss. Isn’t that what
insurance is supposed to do? Give us a call at (417) 883-4343