Dwelling coverage is the portion of your homeowners insurance policy that pays to repair the physical structure of your home. How much dwelling coverage you need depends on the replacement cost of your home.
Pat Howard is a managing editor and licensed home insurance expert at Policygenius, where he specializes in homeowners insurance. His work and expertise has been featured in MarketWatch, Real Simple, Fox Business, VentureBeat, This Old House, Investopedia, Fatherly, Lifehacker, Better Homes & Garden, Property Casualty 360, and elsewhere.
Kara McGinley is a senior editor and licensed home insurance expert at Policygenius, where she writes about homeowners and renters insurance. As a journalist and as an insurance expert, her work and insights have been featured in Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.
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This article has been reviewed by a licensed Policygenius expert to ensure that sources, statistics, and claims meet our standard for accurate and unbiased advice.
Property & casualty claim consultant and expert witness
Britta M. Moss, CPCU, SCLA, AIC-M, has over 25 years of insurance industry experience. In her work as a property and casualty claim consultant, she provides consultation and expert witness services in claim handling standards, practices, and norms. She has been retained by law firms representing plaintiffs and those representing insurer defendants involved in disputes or litigation regarding coverage analysis, investigation, liability determination, damage evaluation, negotiation and settlement. She is a graduate of The Ohio State University.
Dwelling coverage — or Coverage A — is the part of your homeowners insurance policy that protects the physical structure of your home from covered hazards like burning to the ground, getting destroyed by a hurricane, or being crushed by a fallen tree. It'll pay to rebuild your home, making it one of the most important and expensive parts of your policy. How much dwelling coverage you need depends on the replacement cost of your home.
Ready to shop home insurance & get dwelling coverage?
The most common type of home insurance is an HO-3 policy. HO-3 policies are open perils policies, or all risk policies. That means your dwelling — the structure of your home — is protected against all causes of damage unless it’s explicitly excluded in your policy.
Many home insurance companies offer coverage add-ons — also called endorsements — that you can add on to your policy for an additional annual fee to protect you from some of these exclusions listed above.
Here are a few you might want to consider purchasing or adding to your home policy.
Flood insurance: You may be able to add a flood coverage endorsement to your homeowners policy, or you can purchase a separate flood insurance policy through the National Flood Insurance Program or the private marketplace. This coverage can be useful as the National Flood Services estimates that just one inch of flood water can cause $25,000 in damage. National Flood Services. [1]
Earthquake insurance: Earthquake damage isn’t covered by dwelling insurance. In order to get protection against quakes, you may be able to add earthquake coverage to your home policy or purchase a standalone policy.
Water backup coverage: Standard home insurance won’t protect your home against water or sewage backup. That means if your sump pump backs up and the water damages your home, your dwelling insurance won’t cover you. You can purchase water backup coverage for this type of protection — it typically costs $30 a year.
Ready to shop home insurance & get dwelling coverage?
The national average cost for $300,000 in dwelling coverage is $1,899 per year. Dwelling coverage makes up the bulk of your home insurance policy since it covers the largest structure — your home — making it one of the most expensive coverages. In general, the more dwelling coverage you have, the higher your home insurance rates will be.
Dwelling insurance cost by coverage limit
Let’s take a look at the average cost of homeowners insurance in the U.S. based on different dwelling coverage limits, according to our analysis of 2022 rates from across the country.
Dwelling converge limit
Average monthly cost
Average annual cost
$100,000
$79
$946
$200,000
$120
$1,442
$300,000
$158
$1,899
$400,000
$207
$2,481
$500,000
$256
$3,066
Dwelling insurance cost by state
Your home’s location is one of the biggest factors when it comes to the cost of your dwelling insurance. Below is how much $300,000 in dwelling coverage costs on average in every state.
How much dwelling coverage you need depends on the replacement cost of your home — or how much it would cost to rebuild it at today’s construction and labor prices.
It should not be based on your home’s market value, which is how much buyers are willing to pay for it on the real estate market.
Let’s take a look at an example.
Say there was a bidding war on the home you just purchased due to the hot real estate market. While the rebuild cost of the home is only $300,000 — you ended up paying $450,000 to beat out other potential buyers.
You would still only need $300,000 in dwelling coverage to fully protect your home — even though you paid $150,000 more when you bought it.
What factors affect the replacement cost of my home?
The replacement cost of your home depends on multiple factors, including:
The cost of construction and labor in your area
Your home’s square footage
Age of your home
Number of rooms
Architectural style
Number of stories
Recent renovations
Special features in your home
How to calculate dwelling coverage
You can use our replacement cost estimator to help you calculate how much coverage you need. A quick way to calculate dwelling coverage for your home is to multiply the square footage of your home by the average cost per square foot to build in your area.
Yes, you can upgrade your dwelling coverage — in fact, the agents at Policygenius can help you compare insurers that offer dwelling coverage upgrades. Because construction and labor costs can fluctuate — especially in today’s economy — you might want to purchase one of the following extended dwelling coverages to ensure you’re fully protected in the event of a disaster.
Extended replacement cost coverage. Increases your dwelling coverage limits by 20% to 50% to offset a potential hike in construction or labor prices.
Guaranteed replacement cost coverage. Pays out whatever it costs to rebuild your home — regardless of your coverage limits — making it the most expensive type of dwelling coverage.
How to file a dwelling insurance claim
If the structure of your home is damaged by a covered event, you can file a dwelling coverage claim through your home insurance company to get reimbursed for the damages.
Most insurance companies allow you to file a claim online or over the phone. You’ll typically need to provide documentation of the damage, and then your insurer will send an adjuster to your home to assess the situation and calculate a settlement amount.
Your claim payout amount will be subject to your home insurance deductible, which is the out-of-pocket amount you’re responsible for paying before insurance kicks in to cover the rest. Most deductibles range anywhere from $500 to $2,000.
Is dwelling coverage required?
While dwelling coverage is not required by law, most mortgage lenders require you to purchase homeowners insurance (including dwelling coverage) before they’ll extend you a loan. This is because they have a financial stake in your property until you fully pay off your mortgage, so they want to ensure their investment is fully protected.
How much dwelling coverage do I need for a condo?
The amount of dwelling coverage you need for your condo depends on your homeowners association’s (HOA) master policy. The master policy generally covers the building itself, common areas, land surrounding the building, and includes at least some amount of structural coverage for each individual unit.
To determine how much (if any) dwelling coverage you need in your condo insurance policy, you’ll need to find out if your HOA’s master policy is bare walls, single entity, or all-in coverage. You can learn more with our guide to condo insurance.
Types of dwelling coverage
In this article, we focused on dwelling coverage for HO-3 home insurance policies — the most common type of home insurance that the majority of Americans have. But there are a few key differences in how dwelling coverage works for other types of policies.
Protects your condo against all risks except those exclusions listed in your policy at its replacement cost value; how much you need depends on your condo building's master policy
Protects your mobile or manufactured home; whether your policy is all risks or named perils, and actual cash value or replacement cost value varies by company
Dwelling refers to your home. In homeonwers insurance, your dwelling coverage pays to rebuild the structure of your home in the event that it is damaged by a covered loss.
What is dwelling coverage vs. homeowners insurance?
Dwelling coverage is a portion of your home insurance policy. When you buy homeowners insurance, you’re not only insuring the home itself (your dwelling), but you’re also purchasing coverage for your personal belongings, personal liability, and additional living expenses if a disaster forces you from your home.
How do I know how much dwelling coverage I have?
You can check your homeowners insurance declaration page to find out how much dwelling coverage you have. Also called a dec page, this is a 1- to 2-page document you should have received when you first purchased your policy that summarizes your coverage limits, annual premium, deductible, and contact information. If you can’t find it, your insurance company will be able to provide you with a new copy.
What is coverage A in home insurance?
Coverage A is the official term for the dwelling coverage portion of your homeowners insurance policy.
Methodology: How we determined average dwelling coverage rates
Policygenius has analyzed home insurance rates provided by Quadrant Information Services in March 2022 for ZIP codes in all 50 states plus Washington, D.C., for a 40-year-old female homeowner with no claim history, good credit, a $1,000 deductible, and the following coverage limits:
Dwelling: $300,000
Other structures: $30,000
Personal property: $150,000
Loss of use: $60,000
Liability: $300,000
Medical: $1,000
All rates based on the above coverage limits except where otherwise noted.
Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of costs. Your actual quotes may differ.
References
Policygenius uses external sources, including government data, industry studies, and reputable news organizations to supplement proprietary marketplace data and internal expertise. Learn more about how we use and vet external sources as part of our
Pat Howard is a managing editor and licensed home insurance expert at Policygenius, where he specializes in homeowners insurance. His work and expertise has been featured in MarketWatch, Real Simple, Fox Business, VentureBeat, This Old House, Investopedia, Fatherly, Lifehacker, Better Homes & Garden, Property Casualty 360, and elsewhere.
Kara McGinley is a senior editor and licensed home insurance expert at Policygenius, where she writes about homeowners and renters insurance. As a journalist and as an insurance expert, her work and insights have been featured in Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.
Property & casualty claim consultant and expert witness
Britta M. Moss, CPCU, SCLA, AIC-M, has over 25 years of insurance industry experience. In her work as a property and casualty claim consultant, she provides consultation and expert witness services in claim handling standards, practices, and norms. She has been retained by law firms representing plaintiffs and those representing insurer defendants involved in disputes or litigation regarding coverage analysis, investigation, liability determination, damage evaluation, negotiation and settlement. She is a graduate of The Ohio State University.
