WHICH TYPE OF INSURANCE IS RIGHT FOR YOUR POLE BARN?
If you have spent the time and money to build a pole barn, you want to protect your investment with insurance. You will need to choose the right type of coverage based on how you plan to use the building.
A homeowners insurance policy covers other structures on the same property at an amount equal to 10 percent of the house’s value. Homeowners insurance can cover a small post-frame building. If you are planning to use your pole barn on a farm, it will need to be covered under a farm policy. A pole barn that is used for a non-farm business needs to be covered under a commercial insurance policy.
An actual cash value insurance policy covers the building’s replacement value minus depreciation. The amount of depreciation depends on how old the pole barn is and how well it has been maintained. Older buildings typically depreciate at a rate of 1 percent per year on materials, not labor. Actual cash value is not related to the pole barn’s current market value.
A replacement cost insurance policy pays the cost to replace a pole barn without taking depreciation into account, up to the limit of the policy. If the cost to replace the pole barn is more than the policy limit, you will need to pay the difference.
If you are building a new pole barn, you can choose either an actual cash value or replacement cost insurance policy. The premiums should be the same because depreciation has not yet come into play. If you have an older pole barn, you should get a replacement cost policy.
Any additions or improvements you have made to your pole barn should also be covered. You should make sure to insure the contents, including any vehicles, equipment, inventory, or personal property. Vehicles should be covered under an auto policy, and farm equipment should be covered under a farm policy. Equipment used for another type of business should be covered under a commercial policy. You might need to get additional coverage for lost revenue or rent, liability, and costs to comply with local building codes. Discuss your individual insurance needs with your agent or company.
When you are ready contact CHA Pole Barns to talk about your pole barn project.