If your homeowner's insurance policy has been stuck in a drawer, cabinet or just tucked mindlessly away somewhere, it is probably about time to pull it out, shake off the dust and make sure it's still up-to-date. This article is the second in a series of five articles that will help you decipher your homeowner's insurance policy.

You've cleaned the house, mended the fence, fed Fido and shipped the kids off to soccer practice, but don't get too comfortable yet. Have you looked at your homeowner's insurance policy lately? It needs your attention.

While keeping your homeowner's insurance updated is a dismal task, it is of utmost importance. As discussed in a previous article, not only is it important to purchase homeowner's insurance, it is just as important to know what that policy covers.

Homeowner's insurance policies contain several different coverage areas. The topic of the previous article, Part 1 of this series, discussed insuring your residential structure. This article will explain how to insure the other buildings on your property - the detached structures.

COVERAGE FOR DETACHED STRUCTURES

In addition to covering your residence, your homeowner's insurance also includes compensation for damage to detached structures on your property. Whether you have a detached garage, gazebo, tool shed or fancy doghouse, your homeowner's policy should cover those structures in some form or fashion.

Because every single homeowner's policy is unique, you need to know what your policy's coverage limit is. For detached structures, the average homeowner's policy includes compensation for up to ten percent of your home's coverage cost. Confused? Don't fret.

In a nutshell, if your house is insured for $450,000, your detached structures are automatically covered for $45,000. Again, however, your policy may be different.

A few stumbling blocks accompany this ten percent detached structure coverage. First, what if your detached structure is somewhat used for business purposes?

Unfortunately if your detached structure is even partly used for business, your claim can be denied. That's just the way insurance works. If you have a structure on your property that you must use for business, you absolutely have to ask for approval in your homeowner's policy that permits business use.

Second, what if your detached structures cost more than $45,000 to rebuild? Because the typical homeowner's insurance policy automatically covers ten percent of the cost to rebuild for detached structures you must purchase additional detached structure coverage. So in this case, because your garage, gazebo or high-tech tool shed costs $60,000 to rebuild, you will need to purchase $15,000 in additional coverage.

In the end, it is essential to know what you're covered for because each homeowner's insurance policy is different. You need to know what is limited or excluded.

Is your homeowner's insurance policy up-to-date? (Some policies automatically update to your home's current value. Does yours?) While it is easy to let that dust settle over your policy from year to year, keep in mind that putting it aside could cost you much more in the end. Your homeowner's insurance policy may make heavy reading, but it will be even more burdensome should you not know what is covered in it.

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*Please note that this article is not a professional consultation. This article is for general information only. Always seek specific information from a licensed insurance professional.