Mark, a homeowner in Burlington, Ontario, recently finished converting his detached garage into a cozy, heated workshop. He installed custom cabinets, added insulation, and even ran separate electrical wiring to power his tools and lighting system. Proud of his accomplishment, Mark began moving in his power tools, bike collection, and a restored vintage car.
One evening, while reviewing his home insurance policy, Mark paused. A simple question crossed his mind: “Is my detached garage covered under my home insurance policy?”
Like many Canadians, Mark assumed that home insurance automatically covers everything on his property. But when it comes to detached structures such as garages, sheds, fences, or gazebos, insurance coverage becomes more complex than most people expect.
If you own a home in Ontario and have separate structures on your property, this guide will help you understand how home insurance policies treat detached buildings and what steps you must take to ensure everything is adequately protected.
Yes, standard home insurance policies in Ontario typically include coverage for detached structures. However, this coverage is limited under a specific section of your policy, often called Coverage B – Detached Private Structures.
The challenge is that many homeowners overlook this section or misunderstand its limits, leaving expensive structures like garages dangerously underinsured.
Most home insurance policies divide coverage into 4 main categories:
| Coverage | What It Covers |
|---|---|
| A | Main dwelling (house) |
| B | Detached private structures |
| C | Personal property (belongings) |
| D | Additional living expenses (ALE) |
Coverage B applies to any structure that is completely separated from the main dwelling by clear space. If the structure is attached to the house—even by a roof or small breezeway—it typically falls under Coverage A.
Here’s where things become tricky. Most insurers in Ontario limit Coverage B to 10% of your main dwelling's insured value.
| Coverage A (Main Dwelling) | Automatic Coverage B (10%) |
|---|---|
| $550,000 | $55,000 |
| $600,000 | $60,000 |
| $750,000 | $75,000 |
Construction costs have soared in recent years. A detached garage or workshop can easily cost $80,000–$120,000 to rebuild, especially if it includes features such as:
If your garage costs $100,000 to rebuild but you only have $60,000 in Coverage B, you're left paying $40,000 out-of-pocket after a total loss.
Detached structures are covered against the same perils as your main dwelling (Coverage A). These usually include:
Note: Water damage coverage is often limited or excluded for detached structures unless specifically added.
No—Coverage B only protects the structure itself. Items stored inside the garage or shed are covered separately under Coverage C – Personal Property.
| What’s Covered | Where It Applies |
|---|---|
| Tools, sports equipment, furniture | Covered under Coverage C |
| Bicycles, power tools, lawnmowers | Covered, but often with special limits |
| Business equipment | Not covered under standard policies |
Policies often include low-dollar limits for certain high-value items, regardless of where they are stored.
| Item Type | Typical Limit |
|---|---|
| Power tools | $2,000 |
| Bicycles | $5,000 |
| Collectibles | $1,500 |
| Business property | Excluded |
Recommendation: If you store expensive items in your garage, consider adding scheduled personal property endorsements to your policy.
You must increase your Coverage B if any of the following apply:
If your detached structure costs more than 10% of your home’s value to rebuild, your policy is insufficient.
| Dwelling Value | 10% Coverage B | Garage Cost | Gap in Coverage |
|---|---|---|---|
| $600,000 | $60,000 | $110,000 | $50,000 |
You can raise the limit by contacting your broker and adding an endorsement. The additional premium is small compared to the potential loss.
Standard policies exclude structures used for business purposes.
Examples of business use:
Solution: Ask your insurer for a home-based business endorsement to cover both the structure and liability.
High-end garages with the following features may need higher limits:
| Special Features | Impact on Coverage |
|---|---|
| Heated or finished interiors | Increases rebuild cost |
| Custom foundations | Not standard in default valuation |
| Plumbing or electrical connections | Often overlooked in basic policies |
| Stone or brick exteriors | More expensive to replace |
Follow this step-by-step process:
| Step | Action |
|---|---|
| 1 | Locate your policy's Coverage B section |
| 2 | Note the dollar limit listed for detached structures |
| 3 | Estimate your detached structures' total rebuild cost |
| 4 | If the estimate exceeds the limit, contact your broker |
| 5 | Request an increase via endorsement to match full value |
| 6 | Review Coverage C for contents inside those structures |
Detached garages and other outbuildings often represent significant investments. Yet, standard home insurance policies in Ontario cap their coverage at a fixed percentage of your home's value—usually not enough to cover full replacement costs.
To avoid a costly mistake like Mark almost made:
With a few proactive steps and advice from a trusted insurance broker, you can ensure your entire property is properly protected—not just your house, but everything that makes your home complete.
Connect with our team of licensed and insured brokers. Understanding the specific limits and clauses for detached structures can be confusing, and you may easily overlook a critical coverage gap. At Begin Insurance, we simplify the process of home insurance for Ontario homeowners. We review your policy details, calculate the true replacement value of your detached garage, sheds, and outbuildings, and help you secure the necessary endorsements. We ensure that you are protected against all major perils, and give you truly affordable homeowner insurance that protects every part of your property. By comparing the coverages and quotes provided by top insurers in Canada, we can help you extend your existing coverage or get a new mandatory or optional coverage for your property.
To learn more about home insurance in Canada, request a free quote today.
Posted Jul 4, 2019