Detached garages aren’t always just used for parking cars and trucks. This is true for primary residences and vacation rental homes.
People frequently convert detached garages into gyms, workshops, and even bars. These upgrades can cause their value (and the overall property value) to change.
DETACHED BUILDINGS TYPICALLY COVERED
The homeowners’ insurance policy on your vacation rental home typically covers detached buildings like detached garages. Many policies, however, cover these detached structures with a percentage of the overall property’s value.
A typical homeowners policy provides coverage for a detached garage up to 10% of the overall policy value. But 10% might not be enough.
For example, if your vacation rental property is covered for $500,000, the detached garage may be covered for 10% of that value ($50,000). While this might seem like plenty, a total loss claim on a detached garage can fall short if you have upgraded it with floors, a wet bar, or a bathroom, for example.
ADDITIONAL COVERAGE AVAILABLE
As part of the homeowners’ policy, you can usually buy additional coverage (known as Coverage B) for other structures, like your detached garage. If you can’t do this, however, you can look for standalone coverage called Detached Structure Insurance.
With sufficient coverage of the detached garage on your vacation rental home, you will have a much easier time repairing or replacing it, even with today’s high building materials and labor costs.
CONTENTS OF THE DETACHED GARAGE OF YOUR VACATION RENTAL HOME
Maybe the detached garage of your vacation rental home is empty or only used to store old bikes and yard tools. But what if it houses something expensive like a boat or an ATV?
If you bought your policy before buying a boat or other expensive type of equipment, you need to contact your rental home insurance agent to evaluate your coverage.
It can be easy to park your boat in your vacation rental home’s detached garage and forget to tell your insurer. But this can leave you seriously underinsured.
A simple rule is that if you put anything with a motor in your vacation rental home’s detached garage, you need to contact your insurer about your coverage. That way, you can always be confident you have sufficient insurance protection.
WILL RENTERS BE USING THE DETACHED GARAGE?
If you keep the detached garage at your vacation rental home locked up and off-limits for your renters, your rental home insurance situation may be simpler than if you allow renters to use it.
Always discuss the possibility of renters using a detached garage with your insurance agent. You need to be certain that you have sufficient liability coverage when you allow short-term rentals at your vacation rental home.
Detached garages and other structures often have more coverage needs than their owners have considered. Contact Brandon Patterson at 865.453.1414 or email brandon@ownbyinsurance.com; he’ll be happy to discuss your property and provide you with info on the coverage you need.