Dwelling Coverage

Key Takeaways

Dwelling coverage is the foundation of your homeowners insurance policy, protecting the physical structure of your home from perils like fire, wind, hail, and vandalism. It covers the main building and attached structures, but not personal belongings or land. To determine the right coverage amount, focus on rebuilding costs—not market value.

What is Dwelling Coverage?

Dwelling coverage is the part of homeowners insurance that covers the physical structure of your home, including the walls, roof, floors, foundation, and attached structures like porches and garages. It's the most important component of a home insurance policy.

Use our Home Insurance Calculator to estimate your dwelling coverage needs.

What Dwelling Coverage Includes

What Dwelling Coverage Doesn't Include

• Personal property: Furniture, clothing, electronics (covered under personal property coverage)
• Detached structures: Sheds, guest houses, fences (covered under other structures)
• Land: The land your home sits on is not covered
• Liability: Injuries to others (covered under liability coverage)

How Dwelling Coverage is Calculated

Factors That Affect Rebuilding Costs

Dwelling coverage should be based on the cost to rebuild your home, not its market value. Factors include:

• Square footage: Larger homes cost more to rebuild
• Construction type: Frame, brick, stone, etc.
• Roof type: Asphalt, metal, tile, etc.
• Local building costs: Labor and material costs in your area
• Special features: Fireplaces, custom finishes, etc.

Common Coverage Limits

Dwelling coverage limits typically range from $100,000 to over $1 million, depending on the size and value of your home. Most lenders require at least enough coverage to pay off your mortgage.

Why Dwelling Coverage is Important

Dwelling coverage protects your largest investment. Without adequate coverage, you could be left with significant out-of-pocket expenses if your home is damaged or destroyed. According to the Insurance Information Institute (III), the average cost of home damage from a fire is over $35,000.

FAQ

Q: How is dwelling coverage different from other structures coverage?

A: Dwelling coverage protects the main house and attached structures, while other structures coverage protects detached buildings like sheds, fences, and guest houses.

Q: Do I need dwelling coverage if I rent?

A: No, renters don't need dwelling coverage because the landlord's policy covers the building. Renters should get renters insurance for personal property and liability.

Q: Does dwelling coverage include flood or earthquake damage?

A: No, standard dwelling coverage excludes flood and earthquake damage. You need separate flood insurance and earthquake insurance for those perils.

Q: What happens if my dwelling coverage is too low?

A: If your coverage limit is less than the actual rebuilding cost, you may face a coinsurance penalty and have to pay out of pocket for the difference.

References

• Insurance Information Institute (III)
• National Association of Insurance Commissioners (NAIC)
• Federal Emergency Management Agency (FEMA)

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