Insuring your barndominium is vital to protecting your property and everything inside it. If your barndo gets damaged, your insurance policy will cover its repairs. If your building gets declared a total loss, you have a source of funds to rebuild it.
This article explores barndominium insurance, its coverage, and where you can get one. We will also explore the different types of insurance policies to know which one you need for your barndominium.
Table of Contents
- 1 Can My Barndominium Get Insured?
- 2 Who Issues Your Barndominiums Insurance?
- 3 How Much Does Barndominium Insurance Cost?
- 4 What Does Barndominium Insurance Cover?
- 5 What Doesn’t a Barndominium Insurance Cover?
- 6 What are the Different Types of Barndominium Insurance?
- 7 What Determines a Barndominiums Insurance Rate?
- 8 How to Cut Cost on Your Barndominiums Insurance?
- 9 Where Do You Get Insurance for Your Barndominium?
- 10 Frequently Asked Questions
- 11 Insure Your Barndominium Today
Can My Barndominium Get Insured?
Yes, you can get your barndominium insured. Although states do not require homeowners to insure their barndominiums, there are instances when you need to insure your barndo. Aside from ensuring that your investment gets protected, you need to insure your building if you plan on getting a loan to finance its construction. A homeowner’s insurance is a non-negotiable requirement from their borrowers by banks and lending companies.
Who Issues Your Barndominiums Insurance?
Most homeowner’s insurance providers can sell you barndominium insurance. The more important question is what an insurance company will cover and what it won’t. Some insurance companies won’t issue a policy to buildings with metal sidings. This may mean going to another insurance company for coverage. Try explaining to your insurance agent what your barndominium is to ensure they can provide coverage.
How Much Does Barndominium Insurance Cost?
It is impossible to say how much a barndominium insurance policy will cost because it hinges on factors like your credit score, marital status, and claims history. However, the national average cost of homeowners insurance is $1,383 per year for $250,000 worth of coverage.
What Does Barndominium Insurance Cover?
Insurance coverage is the amount of liability or potential loss covered by your insurance provider. Think of it as a shield that protects you from the bad things that can happen to your barndominium.
Exterior and Interior
This is a basic coverage of an insurance policy and is sometimes called dwelling protection. It covers your barndominium and its different sections, like its walls, foundation, and roof. The protection can also extend to other structures attached to your barndo, like its deck, garage, or workshop.
It is common for homeowners’ insurance policies to extend coverage to other structures within your property that are separate from your house. Examples are detached garages, sheds, carports, workshops, or accessory dwelling units.
Contents Within Your Barndo
Homeowners’ insurance can also provide coverage for the personal belongings in your barndominium. This is called personal property protection. It can help you repair or replace belongings that get damaged or destroyed. If you experienced a break-in, it could help you replace stolen appliances. It can also help you replace furniture damaged by a fire. It is also possible to get extended coverage for valuable items like jewelry, watches, and mobile phones.
Homeowners’ insurance usually includes liability coverage. This coverage is for when someone who doesn’t live with you gets injured while on your property. Bodily injury liability coverage can help you pay for medical bills resulting from the injury if you are at fault. It will also cover legal expenses should the injured party decide to sue. An example is a guest who falls down the stairs because of a loose step.
What Doesn’t a Barndominium Insurance Cover?
Although barndominium insurance provides plenty of coverage, it also has limitations. Exclusions are damages or losses that your policy won’t cover.
Acts of God
An Act of God is a disaster that humans cannot control or avoid. Natural disasters and severe weather conditions are not man-made and impossible to avoid, so they are considered Acts of God. Some Acts of God are covered by your barndominium insurance, while others are not.
Damages from a hurricane, tornados, lightning, wildfire, windstorm or volcanic eruptions are covered. Flooding and the resultant damages are not covered. Earth movements like earthquakes and landslides are also not covered.
Acts of War
An Act of War is an exclusion clause in a homeowners insurance policy that excludes coverage of invasions, revolutions, military coups, terrorism, and insurrections. This means that the insurance provider cannot be obliged to pay for losses resulting from war-related events. The Act of War clause became standard after the September 11 terrorist attacks. It protects insurance companies from the astronomical costs of paying claims which might result in bankruptcy.
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Barndominium insurance won’t cover damages or loss intentionally caused by the homeowner or any family member. If the homeowner gets into a fight with the spouse, resulting in shattered windows or broken doors, insurance won’t pay for their repair or replacement. This also extends to the personal liability section of a policy. If the homeowner intentionally caused harm to a guest, their insurance won’t pay for the medical and legal expenses.
What are the Different Types of Barndominium Insurance?
This may come as a surprise to some, but there are different types of homeowners insurance.
Actual Cash Value
If your barndominium insurance has actual cash value coverage, it reimburses you for the depreciated value of belonging. The depreciated value considers the age of the belonging and wear and tear. For example, if your three-year-old refrigerator gets damaged during a fire, the insurance provider will reimburse you, not the amount you paid for the refrigerator, but its depreciated value when it got damaged.
This is a barndominium insurance add-on that extends your coverage limit by an additional 10-50%. Rebuilding your barndominium might be costly, especially after natural disasters or when inflation rates are high. If you have extended value as an add-on, you might be able to rebuild your building without covering excess costs using your money. Since extended value is an add-on, you are not required to get it if you don’t want to.
A replacement cost coverage means that your insurance provider will pay for the replacement of your barndominium. You can rebuild your barndo using the same materials at the current cost up to your coverage limits. If your coverage is up to $200,000, you can rebuild your barndo using the same materials and specifications as the original as long as the total cost is up to $200,000. You can source your kit from our list of the top supplier of barndominium kits or hire an expert from our directory of the top barndominium builders in your area. If there are extra costs, you need to pay for them out of your own pocket.
What Determines a Barndominiums Insurance Rate?
Insurers consider different factors in determining the risk profile of a homeowner. A risk profile is the likelihood that a homeowner will file a claim. If the insurance company believes that the risks of a homeowner filing a claim are high, it will also be more likely to increase that homeowner’s insurance rates.
Space and Usage Distribution
How you use your barndominium will affect your insurance rates. If you have a barndo solely for dwelling, your insurance rate should be at par with those of regular houses. However, expect higher insurance rates if you have a barndominium with a workshop. This is because having a workshop can mean working with potentially hazardous equipment and materials that pose a risk to your barndo.
Insurance Company Relationship
If you have established a long history with an insurance company, you have a higher chance of getting favorable insurance rates, especially if you have filed a minimal amount of claims before. You might also get favorable rates if your other insurance policies are from the same company.
In the same way that having a great credit score can help you get barndominium financing; a great credit score can result in lower insurance rates. It will be even better if you have no outstanding debts. Insurance companies hold policyholders with excellent credit histories and scores in high esteem because they know they are good payers and won’t miss insurance premium payments.
Your location is another determining factor that can result in high insurance rates. For example, Oklahoma has the highest insurance premiums throughout the United States at an average of $3,593 per year for $250,000 in coverage. This is a far cry from the average annual insurance cost in Hawaii, which is just around $987 annually.
The reason behind this has something to do with Oklahoma’s location. Oklahoma is located in the center of Tornado Alley, an area in the Central United States frequented by tornadoes. In turn, this results in Oklahoma having a higher-than-average number of homeowners insurance claims. So, if you plan on building a barndominium in Oklahoma, be prepared to pay high barndominium insurance premiums.
Your location can also impact the barndominium tax you need to pay. Read our article about barndominium taxes to learn how to lower your barndo taxes.
How to Cut Cost on Your Barndominiums Insurance?
There are ways to cut the cost of your barndominium insurance. Although you still need to pay your insurance premium annually, you can save money for your other needs.
Insurance companies offer discounts to entice homeowners to get their policies from them. However, the type of discounts they offer may differ from state to state. Some insurance providers offer up to 5% off if you install a burglar alarm, a smoke detector, or deadbolts. You can also check if your employer has a partnership with an insurance company since they sometimes offer discounts for employees of partner companies.
If you’ve been getting your insurance policy from the same provider for several years, you might get a discount for loyalty. Some insurance providers reduce their premiums by 5% for homeowners who’ve been with them for three to five years. Staying with the same insurance company for six years or more might entitle you to up to a 10% discount on your premium.
If your auto insurance provider also offers homeowners insurance, you might get a better premium. Some insurance companies offer up to 15% off the premium if you purchase two or more policies. However, ensure that the combined price of the two policies is lower than getting the two policies from different companies.
Where Do You Get Insurance for Your Barndominium?
Most insurance providers also offer barndominium insurance. If you want the best policy, ask for quotes from several insurance companies and compare their rates and the coverage they offer. If your auto insurance provider also provides homeowners insurance, try getting your barndominium insurance from them, as they might be able to offer you a discount as a loyal customer.
Frequently Asked Questions
Do I need to insure my Barndominium?
You are not legally obligated to insure your barndominium. However, if you are building a barndo through the help of a bank loan, you need to insure your building because it is one of the loan requirements.
Is it easy to insure a Barndominium?
Compared to insuring a traditional house, it may be harder to insure a barndominium because some insurance companies won’t insure buildings with metal sidings. However, many insurance companies still insure barndos, and you just need to spend time searching for them. Join our Facebook group to get recommendations on insurance companies that insure barndominiums.
Does a Barndominium need a special type of insurance?
Yes, you need to get barndominium insurance, not just regular homeowners insurance. This is because most barndominiums are not just dwellings. Most of them also function as workshops, storage facilities, or garages. Just ask your insurance provider if they have barndominium insurance.
Insure Your Barndominium Today
A barndominium is a significant investment, so it is natural to want to protect your structure. By insuring your barndo, you can make sure that you can repair or rebuild it if it gets damaged. You can also make sure that you can replace all your belongings inside it. Search diligently for an insurance company offering it for barndominiums with excellent coverage and reasonable premiums. Here’re additional topics you might want to explore: barndominium cost, barndominium DIY shell kits, and floor plans.