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Sheds, Barns, and Firepits: How Outbuildings and Backyard Decor Affect Your Homeowners Insurance

April 23, 2019

Homeowners insurance generally covers your house and all other buildings on your property. This includes your kids’ playhouse, the garden shed, your detached garage, and even landscaping features like the firepit area, decorative trees, and the garden.
Don’t wait until you have to deal with damaged property to read and understand your homeowner’s insurance policy, though.

Understand your policy

You may have an all-risk or named peril homeowners insurance policy. It’s important to understand the difference before you need to make a claim for damage to your outdoor structures or landscaping features. A named peril policy only covers specific events listed in the policy. For example, damage resulting from high winds, hail, fire, and theft may be covered. Vandalism and vehicle impact may be excluded. Because this type of policy offers a smaller amount of coverage, it’s also less expensive.
An all-risk policy has a much longer list of included events and accidents. If you want to insure your barn, shed, and landscaping against water damage, you’ll have to get a separate endorsement for sewer backup coverage or overland flood. Earthquake and other land movement coverage are also typically excluded from coverage.
There are approximately 4,000 earthquakes recorded each year in Canada. Both Ontario and British Columbia are in active seismic zones. About 65% of homeowners have earthquake coverage in BC, but only 5% of Ontario homeowners choose this additional coverage. If you have concerns about the safety of your property, talk with your insurance representative about adding earthquake coverage to your homeowner’s insurance policy.

Know the cost of rebuilding your outdoor structures

Talk with your homeowner’s insurance representative to find out exactly what percentage of your homeowner’s coverage can be used to replace or repair outbuildings like a shed, barn, or garage.
For example, if your home is insured for $330,000 and your policy commits a maximum of 10% of the face value to outdoor structures, you could access a maximum of $33,000 to replace the detached garage you use to store your garden tools and riding lawnmower. Raising that coverage to fall in line with actual replacement costs may also raise your insurance premiums.

Consider purchasing extra coverage for expensive landscaping

Replacement costs for landscaping features like retaining walls, firepit areas, and perennial gardens may be higher than you think. Call a few landscaping companies to get a ballpark estimate of what it would cost you to fix damage from a storm or even a car accident that results in damage to your yard.
Pre-packaged homeowners insurance packages allow 5% of the policy’s face value for landscaping, so a $330,000 policy would cover $16,500 worth of damage to fences, landscaping, trees, and shrubs. It may be smart to buy additional insurance if your homeowner’s insurance limits wouldn’t cover the entire cost of replacing your valuable landscaping features.

Don’t forget your deductible

Higher deductibles mean lower premiums, so many Canadians choose to pay more out-of-pocket when they need to make a claim to reduce the amount of money they spend on homeowners insurance premiums. Know your deductible amount and set that money aside in an emergency fund.
It could cost more to properly insure your backyard decor and outbuildings. With severe weather incidents on the rise in Canada, it makes sense to look closely at your current homeowner’s insurance policy to make sure you are getting the right amount of coverage at the best possible rate.