What is Dwelling Coverage?

If you’re a homeowner, you’re going to need to buy homeowner’s insurance. That’s just good financial sense. However, the homeowner’s policy can be confusing if you don’t understand all the terms. To help you build your insurance vocabulary and understanding, let’s help you understand one of the most critical components of your homeowner’s policy: dwelling coverage. It’s represented as Coverage A on the standard homeowner’s policy.

As a responsible homeowner, it’s essential to understand what dwelling coverage is, what it covers, and how it protects your biggest investment. Let’s dive in.

What is meant by Dwelling?

As is common, insurance uses terms that may not be part of your everyday vernacular. Dwelling is one of those terms. Under the “Definitions” section of your policy, you can get your specific carrier’s definition, but we’ll provide you with a common understanding. This will help you get the general concept.

Dwelling coverage refers to your home’s physical structure. It includes the walls, roof, foundation, and other attached structures. These are the things that make up the dwelling or your home’s structure. In insurance terms, the dwelling is the most crucial component of your policy. It’s the most expensive thing to replace, repair or rebuild in case of damage. It’s also the home insurance coverage that helps determine the limit of other coverages on the policy. Like personal property, or other structures.

What is covered by Dwelling Coverage?

Dwelling coverage is designed to protect your home’s primary structure and the structures that are permanently attached to the dwelling. Understanding exactly what is covered by this section of the homeowner’s policy depends on your policy. Homeowner’s policies are typically written as either named or open perils.  Open perils policies provide broader protection. Learn more about perils.

Generally speaking, the standard homeowner’s policy provides protection for things like:

• Fire damage
• Hail or windstorm
• Lightning strikes
• Tornadoes
• Explosions
• Falling objects
• Theft and vandalism
• Damages caused by the weight of snow, sleet, or ice
• Damages caused by a motor vehicle
• Accidental discharge or overflow of water or steam (learn how homeowner’s insurance covers water damage)

What’s not covered by dwelling coverage?

While it’s important to know what is covered, it’s equally important to understand what is not. The standard homeowner’s insurance policy typically does not cover floods, earthquakes, sewer backups, or damage that occurs from a lack of maintenance.

If you are concerned about these types of risks, you can buy additional coverage, or a separate insurance policy designed to cover these risks or perils. For example, you can add water backup coverage to your existing homeowner’s insurance policy, or you buy flood insurance to help protect your home against flooding. If Earthquake is a concern, you can also buy earthquake insurance. Talk to your insurance agent to find out what options are best for you.

How are unattached structures covered?

If you have structures on your property that aren’t attached to the primary dwelling, these are covered under the section of your policy called Other Structures. Other Structures coverage extends to unattached structures on your property, such as garages, sheds, or fences.

The limit for this coverage is typically a specific percentage of your dwelling coverage limit. For example, your dwelling coverage is $700,000, and your policy covers 10% of that amount for unattached structures. In that case, you’ll have $70,000 of coverage for unattached structures.

Dwelling limit and deductibles

The dwelling coverage limit is the maximum amount your insurance policy will pay to repair or rebuild your home. It’s essential to choose the right limit that adequately covers the cost of rebuilding your home. Your deductible is the amount you’ll pay out of pocket before your insurance kicks in. Typically, the higher your deductible, the lower your premiums will be.

How is the dwelling value calculated?

Your insurance provider will determine the replacement cost of your dwelling using a variety of factors, such as the size of your home, its age, and its construction materials. Some insurers may also consider the local cost of labor and materials. It’s essential to review your policy annually to ensure that your dwelling coverage is up-to-date and adequately covers the cost of rebuilding your home.

The bottom line

Dwelling coverage is a crucial component of your homeowner’s insurance policy that provides financial protection for your home’s physical structure and other unattached structures. Understanding how it works and what it covers can help you make informed decisions when purchasing a policy.

If you have more questions about homeowner’s insurance, the coverage, or home insurance discounts, consult your insurance agent. If you don’t have one, you can contact us, or start a quote online. We’re committed to helping our customers understand their policies fully and ensuring that they have the coverage they need to protect their biggest investment.