Your home insurance policy can include any "non-attached" building on your property — so long as you let your insurer know that you have those buildings on your property. This includes tool sheds, gazebos, playhouses and doghouses.
The question isn't so much whether these structures can be covered, but whether they should be covered. This is a valued concern, since adding a structure to the policy can raise your premiums.
The litmus test for coverage should be which structure you’re most likely to file a claim on. Let's consider a few examples.
- Guest/pool houses. If you have another structure on your home that's fit to live in — that is, it’s equipped with bedrooms and bathrooms and a kitchen — then you're certainly going to want to include it on your policy. It is, effectively, a whole other home right next to yours. It would be foolish not to insure it.
- Tool sheds. A tool shed is easy enough to repair and replace out of pocket. But the contents of a tool shed might be considerably expensive to replace. If you're handy with a hammer, you can build a new shed for a few hundred dollars in lumber, which isn't worth filing a claim for. But the tools may run upwards of $5,000 when you add in lawnmowers, chainsaws and power tools to your collection. Even simple hand tools can add up in cost once you're replacing dozens of them at a time. Keep an inventory of your tool shed the same as you do the possessions inside your home.
- Dog houses. You can buy a new doghouse for $50. If you really want to spoil your dog, you can spend a couple hundred. But the cash value of a doghouse is usually going to peak long before you hit your deductible. It might not be a bad idea to include a portable doghouse, such as a dog Igloo, in your inventory. But it might not be worth the higher premiums to include a permanent dog house as a structure.
It's the same question you ask yourself every time you buy insurance: Can I comfortably afford to replace it myself? If the answer is yes, it might not be worth putting on the policy.