Many people use their garages for much more than storing their cars. This means they stand to lose a lot if their garages are damaged, for example, in a fire outbreak. This is why you shouldn't assume that your homeowner's insurance coverage applies to your garage too; there are circumstances in which the coverage may not apply to the garage. Here are a few examples of such circumstances:
It Isn't Attached to the House
Your garage is only considered as part of your house if it is permanently attached to the main house; otherwise, it will be counted among "other structures" in your home. "Other structures" include all construction that isn't attached to the house, such as swimming pools, gazebos, and storage sheds.
These structures don't enjoy full coverage from your homeowner's insurance policy; they are usually covered up to 10% of the main dwelling unit's limit, and they share this coverage. This means if you have several of such structures, and a serious disaster destroys your home, the coverage may not be enough to reconstruct your detached garage.
You Use It for Business
The standard homeowners' policy is only meant to cover your personal assets and not your business assets. For example, if you run a motorcycle repair shop at home, the coverage will not protect your tools and equipment or protect you from business-related liabilities (for example, if someone sues your business). This is the same way in which your standard coverage doesn't apply to business premises on your compound. For example, if you operate a repair business in your garage, your home insurance coverage may not pay for the garage's reconstruction if it is destroyed, especially if the destruction was caused by a business-related disaster.
Lastly, you shouldn't expect your home insurance coverage to pay for your garage's damage if the garage was illegally constructed or renovated. This may be the case, for example, if you handled the electrical system in your garage as a DIY project without involving an electrical contractor. In such a case, the electrical installation might not have been done up to code. Home insurance companies don't want to cover such constructions due to their increased risk. Therefore, the insurance company might not compensate you for such a garage if it is destroyed especially if the destruction is related to the illegal construction.
Therefore, don't assume that every structure in your compound is fully covered. Talk to your insurance agent to get a clear picture of your coverage so that you can make any adjustments necessary. Check out sites like http://olynorthwest.com/ for more information.