Is My Garage Covered by Home Insurance?

Most people are familiar with car insurance...after all, it’s required in most states. And yet, when it comes to owning your home—a far more expensive investment than your car—you may not actually be required to have homeowners insurance.

Expensive and Irreplaceable...Yup, Probably Need Insurance

Of course, even if you were not required to have it, you’d probably want to take out an insurance policy on something as large, expensive, and irreplaceable as your home. What would happen in the event of a fire, burglary, or earthquake, especially if your home got damaged? Would you shrug it off and walk away, dedicating you and your family to a life of poverty? Probably not. Whatever type of title relationship your state recognizes when it comes to lenders, borrowers, and homeownership, chances are that you owe somebody a huge chunk of money for your house and you’re paying it off. Since that party has a vested financial interest in your place of residence, and they’ve invested in you paying back the loan (with interest) they want to make sure the primary part of their investment (the house)  stays safe and secure. That said, your mortgage company will probably require you to have homeowners insurance.

What Does Your Policy Cover?

Now when it comes to your insurance policy, you probably made sure it covers the basics. You know, fire, theft, earthquakes...depending on where you are, maybe tornadoes. Flood insurance is an extra add-on that only applies to certain areas. And then there are some more wonky components your policy will cover, such as a marauding band of rioters or a civil disorder. But did you ever stop to think about what other parts of your home a homeowner’s insurance policy covers? Well, for one thing, there’s the garage. Now in days past, the garage was actually a separate structure, so you might have been more likely to wonder if it fell under your insurance policy. Of course, these days, most garages are part and parcel of the structure of the home itself, so you would most likely assume that it’s covered...and you would be correct.

What if My Garage is Detached?

Homeowners who own a property with a detached garage need to consider the following. If your garage is detached from the home, your policy will probably have limits on its coverage. Usually, those limits are based on a percentage of the policy. For example, if the limit was set at 10%, and your home had a $500,000 policy, your detached garage would be covered for up to $50,000. That amount might actually be enough for most people to feel comfortable, but it’s important to take stock of what’s inside the garage and add it all up. If something happened to it, say, an explosion or fire that totally destroyed everything within, would $50,000 be enough to replace everything?

What’s In the Garage?

Thankfully cars are usually going to be covered by your vehicle policy, so whether you’re driving a ten-year-old four-door sedan from a standard manufacturer, or you have seven different European imports (one for every day o the week). If you’re not storing anything in your garage other than a water heater, some old paint cans, and a few boxes of old clothing, that amount of money might be more than sufficient—remembering of course, to factor in the building cost of the garage. But if you’re storing a collection of vintage guitars, first-run prints, and expensive power tools in your garage, then $50,000 might not be enough to cover the cost of replacing it, plus replacing all the items within. That said you may want to purchase additional coverage, especially if you’re using your garage to store valuables or additional vehicles not covered by your policy, such as a tractor, ATV, or hovercraft.  

How Comfortable Are You with Risk?

When it comes to risk, some people are fine with risking it. Some people are fully aware that their policy won’t cover everything, and they don’t care. They figure the odds of something catastrophic happening are low, and there’s no point shelling out extra money every year to cover the distant possibility of financial loss. Still, others have reached a point in life where they’re just grabbing cash out of the air, and they’re not worried about having to pay to replace things they’ve lost in an emergency. Others can’t handle the idea of a total loss and are willing to pay extra money every month to secure some peace of mind regarding their possessions.   It’s all about personal comfort when it comes to how much risk you’re willing to take on, but if you can afford it financially, it’s always a smart move to err on the side of caution and insure your goods.

Declare the Goods

Now, even if your garage is part of the building that constitutes your actual house when it comes to the contents within your home, you still need to declare their value to the insurer. If you don’t, in the eyes of that company, it’s as if they don’t even exist. Granted, it can be a real hassle to buckle down and assess the value of every little thing in your garage, but you’ll want to do that at the very least for noteworthy, valuable items.  The alternative is that if you go through some sort of burglary or catastrophe, then you won’t be able to recoup the cost of these items or replace them if you can’t afford to do it out of pocket. And when it comes to your garage and the question of whether or not it’s covered by your policy, there’s one other factor that’s important for consideration.

Taking Care of Business

Do you run any kind of business out of your garage? If you do, your insurance company may not cover the space in which you conduct your business, and you’ll need to get a separate policy. This is a fine point that’s really best navigated by speaking with your home insurance company honestly and directly about your insurance coverage limits.  Now you may think that you're not really running a business if you don’t have a registered LLC, a website, and someone who oversees customer service processing calls. But if you’re doing any kind of activity in your garage that involves taking payment for some sort of good or service, be it working on cars, babysitting kids (say, if you turned your garage into a playroom) or dressing hair, you might run into some complications making sure your garage is insured. In fact, if you’re explicitly using your garage for business, it won't be covered, so you’ll want to look at your options for picking up a secondary policy. Remember, when it comes to insurance, the bottom-line rule is better safe than sorry.  

Garage Home Insurance

In conclusion, your garage is definitely covered under home insurance. Nowadays, homeowners have more power to negotiate friendly home insurance coverage that can cover attached or detached garages. It's up to you to speak to your mortgage association to get an estimate of what kind of coverage you already have and the type of coverage you really want. More people are switching to a detached garage in order to get extra space and the triangular wall that faces the front and back of your garage. Now's the time to check out Danley's for quality garage construction and trustworthy service. Speak to a specialist and get a free quote today.