As a homeowner, the last thing you want is to lose your home or associated structures from any risk. Therefore, obtaining home insurance to cover your home against potential risks is wise. But what if you have a barn that gets destroyed? Does homeowners insurance cover barns?
Well, homeowners insurance covers barns and other detached structures, such as sheds and gazebos, on your property up to 10% of the dwelling limit. You may, however, need separate add-on covers for specific catastrophes like earthquakes, floods, and water damage.
In the case of keeping animals or grains for commercial use, you may need to procure a special business insurance policy, as homeowners insurance won’t cover you for non-commercial use. Moreover, you can get farm insurance that covers the farm property and outbuildings and can extend to your home, possessions, livestock, farm machines, and fields.
So, there are ideally four insurance options for covering barns, one of which is homeowners’ insurance. And since it’s not the only cover, it’s essential to know to what extent you can rely on home insurance for barn coverage and when to look elsewhere. Let’s start by first examining what home insurance covers.
What Does Home Insurance Really Cover?
Generally, home insurance covers the following:
Dwelling (Coverage A)
Homeowners insurance primarily covers the home of the policyholder. It takes care of the cost of the structure, and the compensation varies from home to home. Just to be precise, the coverage covers these specifics of the physical structure of the house:
- Roof
- Building frames
- Flooring
- Chimney
- Attached garage
- Attached porch and patio
- Permanent installations like bathroom fixtures and cabinets
- Built-in appliances like water heater and furnace.
Other Structures (Coverage B)
The ‘other structures’ that fall under coverage B include outbuildings or structures not attached to the house but found on your property. The compensation for coverage B is usually up to 10% of the dwelling’s coverage limit.
‘Other structures’ do not include structures used for commercial purposes, even if they are on your property. Here are notable structures that fall in this category:
- Barns
- Gazebos
- Detached guest house
- Detached garage
- Animal sheds
- Fences
Personal Property (Coverage C)
Under coverage C, house insurance covers personal items such as furniture, electronics, appliances, sports equipment, clothing, and certain jewelry.
However, it does not cover valuables like expensive jewelry, art collections, and other valuables.
Additional Living Expenses (Coverage D)
Sometimes referred to as Loss of Use, coverage D or Additional Living Expense coverage takes care of temporary expenses while your house is being fixed. It reimburses you for expenses you ordinarily wouldn’t incur if you lived in your home. That includes hotel accommodation, meal costs, increased mileage, and credit check fees, about 20-30% of coverage A.
Personal Liability (Coverage E)
Coverage E, or Personal Liability Coverage, covers bodily injuries suffered by others on your property and property damages that you are directly responsible for. This insurance covers medical bills, legal fees, and other related damages where the homeowners are at fault. The compensation is about $100,000 – $500,000.
Medical Payments (Coverage F)
Medical payments, which fall under Coverage F, cover medical-related expenses related to injuries on your property regardless of who is at fault. The maximum limit usually is $5,000.
What Does Home Insurance Not Cover?
There are several exceptions when it comes to home insurance coverage, and they include the following:
Earthquake Damage
Standard homeowners insurance policies ordinarily don’t cover earthquake-related damages. You need a separate earthquake insurance policy to protect your home structure, barn, and other buildings from earthquake damage.
Flood Damage
Standard homeowners’ insurance would not cover you against flood damage. You’ll need flood insurance for that. So, if your barn has been damaged by flood alongside other structures, homeowners insurance won’t cover you against the damages.
Generally, getting additional flood insurance if you live in a flood-prone area is advisable to protect your home and outbuildings from water damage.
Owner Neglect
As a homeowner, it’s your responsibility to take good care of your home and outbuildings. Damages related to neglect are usually not covered by homeowners insurance, and that includes those related to:
- Mold infestation
- Termite damage
- Rodent damage
- Insect damage
- Rust
- General wear/tear.
What Are Your Options for Barn Coverage?
When it comes to covering outbuildings like barns, here are your four options:
Homeowners Insurance
Homeowners Insurance will cover your barn from damage as part of ‘other structure’ or Coverage B alongside other outbuildings such as sheds, gazebos, detached garages, and fences. However, you’ll need special business insurance if the barn is used for commercial purposes, such as storing grains or housing farm animals for sale
. A homeowner’s insurance will not cover your barn against flood and earthquake damages. You’ll need to separate covers for such risks.
Separate Add-on Coverage
Suppose you live in an earthquake-prone or flood susceptible area. In that case, you’ll need a separate cover in addition to home insurance to protect your barn from possible damage. Talk to your insurance provider to ensure you’re using the correct policy.
Farm Insurance
Farm Insurance is a specialized insurance policy that covers commercial and personal risks attached to running a ranch or farm. Unlike homeowners’ insurance, farm insurance offers more comprehensive coverage, which includes the following:
- Your home and its possession
- Personal liability
- Farm supplies
- Farm equipment
- Livestock
- Farm structures
- Farm/vineyards/ranch
- Business liability
Barns fall under farm structures, and so do silos, sheds, and other outbuildings. Consequently, you can obtain farm insurance to cover your farm and its structures from potential damages.
Special Business Insurance
Suppose you intend to use your barn for commercial purposes, such as storing grains or keeping farm animals for sale. In that case, you can’t count on homeowners’ insurance to cover them. You’ll need a separate business insurance policy to cover them, as that amounts to commercial applications. Homeowners insurance will only cover barns used for non-commercial use.
Ready to Insure Your Home and Barn?
Home insurance is undeniably a must-have when buying a new home. If you want to use your barn for non-commercial purposes, you can count on house insurance to offer you standard coverage. However, you may need to take separate coverage for risks like flood and earthquake or specialized business insurance for commercial use of the barn.
