Walk your lot instead of your floor plan and you're looking at Coverage B. Of the six coverages in an HO-3, B is the one that pays for structures on the property set apart from the house by clear space, or connected to it only by a fence or a utility line. The attached garage is part of the dwelling and belongs to Coverage A; the detached garage twenty feet away is Coverage B. Same lot, same fire, different bucket — and the buckets have very different sizes.
What counts as an "other structure"
| Structure | Where it lands | Worth knowing |
|---|---|---|
| Detached garage | Coverage B | The classic example — separated from the house by clear space |
| Attached garage | Coverage A | Physically connected, so it's part of the dwelling |
| Fences and gates | Coverage B | The structure damaged most often in wind and fire events |
| Shed or workshop | Coverage B | The building is B; the tools inside are Coverage C |
| In-ground pool or spa | Usually Coverage B | The lawsuit side of a pool is Coverage E, not B |
| Detached ADU or guest house | Coverage B | Where the 10% default most often fails — more below |
Like the dwelling, Coverage B is written open-perils on an HO-3: any cause of loss is covered unless the policy specifically excludes it, and the insurer has to point to the exclusion. Fire — including wildfire — is a covered peril here, exactly as it is on the house itself.
The 10% default — and the lots it no longer fits
Coverage B is typically set at 10% of Coverage A, automatically, without anyone measuring anything. For the lot the form imagined — a fence, a small shed, maybe a detached garage — that's usually plenty. The default assumes your lot is average.
California lots are increasingly not average. A backyard cottage, a serious workshop, a pool with real hardscape, long runs of fencing on a larger parcel — each of these eats the default faster than homeowners expect. And because B scales off A, a stale dwelling limit quietly drags Coverage B down with it. It's one more reason the dwelling number has to be right before anything else in the policy can be.
The ADU boom is quietly a Coverage B problem
California has spent years making ADUs easier to permit, and homeowners responded: backyard cottages, converted garages, full guest houses. An ADU is real construction — foundation, framing, plumbing, electrical, a kitchen — built by the same trades at the same labor and material prices as the main house. Our wizard starts dwelling estimates at roughly $350 per square foot as a starting point the broker verifies; an ADU is priced by that same market.
Now run the comparison. Ten percent of Coverage A has to stretch across everything on the lot. A well-built ADU alone can absorb most or all of it — before the fence, the shed, and the pool equipment see a dollar. After a wildfire that takes the whole property, that arithmetic surfaces at the worst possible moment.
The fix is straightforward: raise the Coverage B limit by endorsement, or have the ADU specifically scheduled, so the structure is insured for what it would cost to rebuild rather than for what a percentage formula guessed. One wrinkle worth naming: a garage conversion that's attached to the house is a Coverage A conversation, while a new detached build is Coverage B. Your broker sorts which is which at application.
Run the ADU math once
Estimate what your ADU would honestly cost to rebuild, then compare it to 10% of your Coverage A. If it's close — or over — the default is wrong for your lot, and the limit should be raised before renewal, not after a loss. Coverage is always subject to carrier underwriting, so get it on the application early.
A rented ADU changes the analysis
Here's the part that surprises people: HO-3 forms commonly restrict or exclude other structures rented to someone who isn't a member of your household. Build the ADU for your mother-in-law and Coverage B behaves normally. Sign a lease with a stranger and you've changed the risk — and possibly stepped outside what the policy intends to cover.
A long-term tenant pushes the conversation toward landlord territory: some carriers endorse the exposure, others want the property written differently, and a dedicated rental generally belongs on a DP-3 dwelling policy. Occasional hosting has its own rules — our short-term rental guide covers why HO-3s balk at Airbnb income. Either way, disclose it. Misstated occupancy is the kind of thing that puts claims at risk, and the rent you'd lose while rebuilding is its own coverage question, answered under Coverage D's fair rental value.
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Get a pricing indication →Fences after wind and fire
Fences are the workhorses of Coverage B claims. Wind events knock them flat; wildfire and ember storms burn them; and because a fence is priced by the linear foot, a long property line adds up to real money faster than its owner expects. Both wind and fire are covered perils on an open-perils Coverage B — the practical questions are condition, documentation, and the deductible.
The deductible is the part to think through before filing. Homeowners deductibles commonly run $1,000–$10,000, and a fence-only loss can land close enough to that number that filing buys you little except a claim on your record. Our claims guide walks the file-or-eat-it decision. Two more fence realities: neighbors who share a fence each typically insure their own interest in it, and a wooden fence that runs right up to the house can carry flame to the structure — which is why home-hardening guidance pays attention to the last few feet where fence meets wall.
Pools, sheds, and the rest of the lot
An in-ground pool usually sits in Coverage B as a structure — the shell, the decking, the equipment. The lawsuit a pool can generate is a different coverage entirely: liability lives under Coverage E, small guest injuries under Coverage F, and underwriters care a great deal about fencing and self-latching gates. Our pool guide covers both halves.
Sheds and workshops split the same way: the building is B, the contents are C. And one exclusion worth knowing before you need it — an other structure used for business purposes is commonly excluded or restricted. If the garage became a woodshop with paying customers, that's a home business insurance conversation, not a Coverage B assumption.
When to raise the limit — and how
Once a year, walk the lot the way an adjuster would. List every structure. Price each one honestly at today's construction costs, not at what it cost to build. If the total crowds 10% of Coverage A, ask your broker to endorse Coverage B higher — increases are generally inexpensive relative to the exposure they close, and the request takes minutes. Revisit after any project: new fence, new shed, new pool, and especially a new ADU. The default is a formula. Your lot is not.
Frequently asked
Is my attached garage covered under Coverage B?
No — a structure physically attached to the house is part of the dwelling and falls under Coverage A. Coverage B is for structures separated by clear space, like a detached garage or shed.
Does Coverage B cover my ADU if I rent it out?
Often not automatically. HO-3 forms commonly restrict structures rented to non-household tenants. A long-term rental usually calls for an endorsement or DP-3 treatment; short stints have their own rules. Disclose the rental and let your broker place it correctly.
Are fences covered after a windstorm or wildfire?
Yes — Coverage B is open-perils, and both wind and fire (including wildfire) are covered. Photograph the damage, get a repair bid, and weigh the bid against your deductible before filing.
Can I raise Coverage B without raising Coverage A?
Yes. Coverage B starts as a percentage of A, but carriers let you increase it by endorsement when the lot carries more than the default assumes. It's the standard fix for ADUs, large shops, and extensive fencing.