What Is Coverage B in Homeowners Insurance? Sheds, Fences, and Limits

Coverage B in homeowners insurance is the part of a standard policy that pays to repair or rebuild the detached structures on your property, the buildings and permanent improvements that stand apart from the house itself. On the common HO-3 form, the limit is set automatically at 10 percent of your dwelling (Coverage A) amount, so a home insured for $300,000 carries $30,000 of Coverage B for all other structures combined.¹

What Counts as an Other Structure

A structure falls under Coverage B when it sits apart from the main dwelling by clear space. A fence, utility line, or similar connection running between the two does not change that classification; the detached building still counts as a separate other structure.¹

The dividing line is physical. If a structure shares a wall, roof, or foundation with the house, it is part of the dwelling and insured under Coverage A instead. A built-in garage, an attached deck, and a sunroom bolted to the house are all dwelling. The distinction matters because the two coverages have separate limits, and the wrong classification can leave you short on one side.

What Coverage B Protects

The coverage applies to a wide range of permanent improvements, provided they are detached from the house:

Detached garages and carports
Sheds and workshops
Gazebos, pergolas, and pool houses
In-ground swimming pools and surrounding permanent fixtures
Fences and retaining walls anchored to the ground
Driveways and walkways
Private docks and seawalls at your residence

Roof vs. Ground Solar Panels

Rooftop solar panels are part of the dwelling and sit under Coverage A. Ground-mounted arrays are typically treated as other structures and fall under Coverage B. Because Coverage B limits are much lower than dwelling limits, a freestanding solar installation worth tens of thousands of dollars can create a serious gap unless you raise the limit.

The Structure, Not What’s Inside It

Coverage B pays for the physical structure and its permanent fixtures: walls, roof, foundation, and anything built in. The movable belongings stored inside, including lawn mowers, tools, and bicycles, are personal property under Coverage C. If a storm levels your detached garage, Coverage B rebuilds the garage and Coverage C handles the contents.

What Perils Are Covered

Under an HO-3 policy, Coverage B is open-peril, the same broad standard that applies to the dwelling.¹ Any sudden, accidental physical loss is covered unless the policy specifically excludes it. Typical covered losses include fire, lightning, windstorms, hail, vandalism, falling objects, vehicle damage, and the weight of ice or snow on buildings.

Several exclusions apply specifically to other structures, and they catch homeowners off guard more than any other part of the coverage:

Freezing, thawing, and the weight of ice or water on fences, patios, swimming pools, foundations, retaining walls, piers, and docks are not covered, even where the same perils would be covered on the dwelling.
Collapse of a structure is generally excluded.
Vandalism is excluded if the dwelling has been vacant more than 60 consecutive days before the loss.
Wear and tear, rust, rot, and mechanical breakdown are never covered.
Insect and rodent damage, including termites, is excluded.
Settling, cracking, shrinking, or expansion of structures falls outside coverage.
Earth movement (earthquakes, landslides, sinkholes) and flooding require separate policies.

The freeze-and-thaw carve-out is the one most likely to surprise you. A hard winter that cracks a retaining wall or heaves fence posts out of the ground does not produce a covered claim, even though freeze damage inside a detached garage might be covered if the building was heated or its water supply was shut off and drained.

Business Use Voids the Coverage

A detached structure used for business loses Coverage B protection. A woodworking shop that sells its output, a detached office that hosts paying clients, or a shed used to store business inventory all fall outside the standard policy. One narrow exception: a structure that contains business property owned solely by you or a tenant of the dwelling may still receive limited coverage.¹ Full protection usually requires a separate commercial policy.

Rentals and Home-Sharing

Renting a detached building, such as a guest house or converted garage apartment, to someone who does not also live in the main dwelling takes that structure out of Coverage B. Short-term rentals through home-sharing platforms raise the same problem. Standard policies classify home-sharing host activities as a business, which triggers exclusions for the structure itself and for the liability and medical-payments coverage tied to it. Endorsements built for short-term rental activity are available from many insurers, and frequent hosts may need a standalone commercial policy.

Land Is Not Covered

Coverage B does not pay for the land. If a sinkhole opens beneath a detached garage or erosion washes away part of the yard, the policy may cover the destroyed structure but will not pay for the lost dirt, terrain, or land value.

How the Limit Works

The default Coverage B limit is 10 percent of Coverage A.¹ A $400,000 dwelling comes with $40,000 of other structures coverage. That figure applies to every detached structure on the property combined, not per structure. One large claim or several smaller claims from the same event all draw from the same pool.

Your policy deductible applies to Coverage B claims the same way it applies to dwelling claims. A $1,000 deductible comes out of the payout before you see a check.

Debris Removal

Debris removal after a covered loss is generally included within the Coverage B limit. If the cost of repairs plus hauling away debris exceeds that limit, the policy provides an additional 5 percent of the limit for debris removal.¹ Separately, up to $1,000 is available for removing trees that fall and damage a covered structure or block a driveway, with no more than $500 applied to any one tree.

How Claims Pay Out

What you actually receive depends on whether the damaged property is a “building” or a “structure that is not a building.” Many homeowners never notice this split until a claim.

Buildings, meaning detached garages, workshops, pool houses, and similar enclosed structures, are settled at replacement cost. The insurer pays to rebuild with equivalent materials and quality, with no deduction for age or depreciation.¹
Structures that are not buildings, meaning fences, driveways, patios, retaining walls, and similar non-enclosed improvements, are settled at actual cash value. The insurer deducts depreciation based on the age and condition of the materials.¹

The difference shows up fast. A windstorm that destroys a 15-year-old detached garage produces a payout based on what it costs to rebuild today. The same storm flattening a 15-year-old wooden fence pays only the share of useful life that remained. If the fence had an expected 20-year lifespan, you might see a quarter of the replacement price.

When to Raise the Limit

The 10 percent default works for a property with a small shed and a basic fence. It stops working quickly as structures stack up. A detached two-car garage alone can cost $30,000 to $50,000 to rebuild. Add a pool, perimeter fencing, and a storage shed, and the total runs past the default limit.

You can raise the cap by adding an other structures increase endorsement. To decide whether you need one, add up the estimated replacement cost of everything detached from the house: garage, fencing, pool, shed, retaining walls, docks, and any ground-mounted solar array. If the total runs above 10 percent of your dwelling coverage, the endorsement closes the gap. The additional premium depends on how much coverage you add and where you live.

Injuries Around Other Structures

Coverage B pays for the structures themselves and nothing else. If a guest is hurt in or around a detached building, by tripping on a pool deck, falling in a workshop, or being struck by a collapsing shed, the medical bills and any lawsuit are handled by Coverage E (personal liability) and Coverage F (medical payments to others). Those protections apply across the property, including around other structures, but they do not reach injuries connected to business use or short-term rental activity unless you carry the right endorsement.

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Insurance Information Institute. Homeowners 3 – Special Form