Table of Contents
Dwelling coverage, sometimes called dwelling insurance, is part of your homeowners insurance policy. Specifically, dwelling insurance helps pay for the rebuilding or the repair of the physical structure of your home if it’s damaged by a covered hazard.
In this article, we’ll explore how dwelling coverage works and what it’s likely to cover.
Key Points
• Dwelling coverage is the part of a homeowners insurance policy that helps pay for rebuilding or repairing the physical structure of a home when it’s damaged by a covered hazard.
• Key parts of a home protected under dwelling coverage include walls, ceilings, floors, the roof, built-in appliances, attached structures like garages, and HVAC, electrical, and plumbing systems.
• Some hazards commonly covered by dwelling insurance include fire, smoke, hail, lightning, windstorms, vandalism, theft, falling objects, and damage caused by the weight of snow, sleet, or ice.
• Determining the right coverage amount involves considering a home’s square footage, construction materials, quality of the finishes, and the typical labor and material costs in the region.
• Dwelling coverage limits are generally based on the cost of rebuilding a home rather than its market value, making regular policy reviews essential to keep pace with rising construction costs.
Dwelling Coverage Meaning: What It Is and How It Works
Dwelling coverage, also known as Coverage A, is a standard part of homeowners insurance. It’s the part of the policy that helps you pay for repairing or replacing the physical structure of your home if you suffer damage from an event that your policy covers.
The parts of your home that might be covered under dwelling coverage include the walls and ceilings, floor foundations, the roof, built-in appliances, structures that are attached to the house (like a garage or porch), and HVAC, electrical, and plumbing systems.
What Does Dwelling Insurance Cover?
Dwelling Insurance typically protects you in the case of hazards such as fire/smoke, hail, lightning strikes, windstorms, explosion, theft, vandalism, falling objects, damage from an aircraft, damage from a motor vehicle, and damage caused by the weight of snow, sleet, or ice.
Coverage can vary in different states or geographic regions. However, dwelling coverage generally covers only damage to the physical structure of your home, including the roof, walls, floor foundation, built-in appliances, and attached structures. It doesn’t protect your personal belongings.
Recommended: What Does Homeowners Insurance Cover?
What Dwelling Insurance Does Not Cover
Most standard homeowners insurance policies don’t cover floods, earthquakes, sewer backups, or damage that occurs due to a lack of maintenance. However, you may be able to purchase additional coverage or a separate insurance policy to provide protection from some of these additional events.
If you live in a condo, it’s important to understand the difference between HO-3 vs. HO-6 insurance. Basically, the former is more common for single-family homes, while the latter is used for condo units. A condo insurance policy offers property protection that can help pay for repairs to the walls of your condo unit and its interior. Your condo association’s insurance policy may help cover other parts of the building, like the roof, basement, elevator, walkways, and courtyards.
Recommended: Does Homeowners Insurance Cover Fire?
What Counts as Your Dwelling?
When it comes to dwelling coverage, your dwelling can include more than just the physical structure that you inhabit. Dwelling insurance covers the home you live in plus attached structures, like an attached garage or a front or back porch.
Structures Not Covered by Dwelling Coverage
Structures on your property that aren’t connected to your home aren’t included in dwelling coverage. These are things like a detached garage, fence, or shed on your property.
However, the other structures coverage on your homeowners insurance policy may help cover damage to these detached structures on your property. Also known as Coverage B, other structures coverage is another part of a homeowners insurance policy. It helps pay for costs to repair or replace structures other than your home if they are damaged by a covered risk.
Recommended: Does Homeowners Insurance Cover Water Damage?
Dwelling Coverage Limits and Deductibles
Dwelling coverage comes with limits and deductibles. The limit is the maximum amount that the homeowners insurance policy will pay toward a covered loss. The deductible is the amount you will pay out of pocket toward a covered claim.
When you purchase a homeowners insurance policy, you choose your dwelling coverage limit. In fact, your dwelling coverage limit is one of the factors that determines how much your homeowners insurance is. Bear in mind that your dwelling coverage limit should generally be based on the cost of rebuilding your home, not necessarily the market value of the home.
Recommended: Does Homeowners Insurance Cover Roof Leaks?
How Much Dwelling Coverage Do You Need?
As you’re considering how to buy homeowners insurance, remember that you’ll need enough dwelling coverage to rebuild your home from the ground up at today’s prices. However, this wouldn’t include the cost of the land or the cost to replace everything inside the home.
To determine how much dwelling coverage you need, you should factor in the square footage of your home, the quality of materials and finishes in your home, the materials that your home is made of (brick, wood, stone, etc.), and typical labor and material costs in your region. Since building costs rise over time, review your policy regularly to ensure that you’re keeping up with inflation.
The Takeaway
Knowing how to buy homeowners insurance means knowing what’s included in a policy. Dwelling coverage is an important part of homeowners insurance, and it’s key to understand what it does and does not cover.
If you’re a new homebuyer, SoFi Protect can help you look into your insurance options. SoFi and Lemonade offer homeowners insurance that requires no brokers and no paperwork. Secure the coverage that works best for you and your home.
SoFi brings you real rates, with no bait and switch.
FAQ
Is dwelling coverage the same as homeowners insurance?
No. Dwelling coverage is one part of homeowners insurance, but they are not identical.
Does dwelling coverage protect my personal belongings?
No, dwelling coverage doesn’t protect your personal belongings. It covers only the physical structure of the home, like the roof, walls, floor foundation, built-in appliances, and attached structures.
What is the difference between dwelling coverage and other structures coverage?
Dwelling coverage helps pay for the rebuilding or the repair of the physical structure of your home if it’s damaged by a covered hazard. Other structures coverage helps pay to repair or replace structures that aren’t part of your home – like a separate garage – if they’re damaged by a covered risk.
Does dwelling insurance cover flood or earthquake damage?
Dwelling insurance covers damage to your home caused by hazards that your homeowners insurance covers. It doesn’t cover flood or earthquake damage.
How do I know if my dwelling coverage limit is high enough?
Your dwelling coverage should be enough to rebuild your home from the ground up at today’s prices.
Photo credit: iStock/Iryna Melnyk
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOPRO-Q326-023