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Dwelling coverage, also known as dwelling insurance or Coverage A, is the part of your homeowners insurance that helps pay to rebuild or repair the physical structure of your house in the event it’s damaged by a covered peril, like a fire, windstorm, or a lightning strike.
Along with covering the structure of the home, dwelling insurance also covers built-in systems and appliances (like your water heater, HVAC, and plumbing) as well as attached structures (like your garage or porch).
The dwelling coverage limit in your policy should be equal to your home’s replacement cost, or the amount it would cost to completely rebuild your house at the current prices construction and labor. For an accurate rebuild estimate, consider a replacement cost appraisal or use a dwelling coverage calculator.
Dwelling coverage, or Coverage A, is the portion of your home insurance policy that helps pay to rebuild or repair your home in the event of a covered loss, like a fire, windstorm, hail storm, or vandalism
The dwelling includes your your home’s roof, frame, foundation, walls and flooring, cabinetry, built-in appliances, and any additional structures attached to the home
The dwelling coverage limit in your policy should be equal to the replacement cost, or rebuild value, of the home. Your dwelling coverage limit may be higher or lower than the home’s market value
If you own a condominium unit, you may need some amount of dwelling coverage in your condo insurance policy to cover what your building’s master policy doesn’t cover
Dwelling coverage is the main component of homeowners insurance, covering the physical structure of your home against perils, or hazards, spelled out in your policy. Most homeowners insurance policies cover damage or loss caused by the following perils:
Fire or lightning
Windstorms or hail
Damage caused by an aircraft
Damage caused by a vehicle
Weight of ice, snow, or sleet
Water damage caused by burst pipes or appliance overflow
Frozen plumbing, heating, air conditioning or automatic fire sprinkler systems
If the structure of your home is damaged by any of these perils, file a claim with your insurance company to be reimbursed for the loss. Your home is covered up to the dwelling coverage limit in your policy. To see how much dwelling coverage you have, check your policy declarations page.
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If the structure of your home is damaged by any of the following disasters or causes of loss, you likely won’t be covered by homeowners insurance. The most commonly excluded perils include:
Regular wear and tear
Damage caused by pests or vermin
It’s also worth pointing out that additional structures on your property — like a detached garage, gazebo, fence, or gardening shed — aren’t protected by dwelling coverage but are covered under the other structures component of your policy. The coverage limit for this portion of your policy is typically 10% of your dwelling coverage limit, so if your dwelling coverage is $300,000, you’d have $30,000 in coverage for any other structures on your property.
From your insurance company’s perspective, the dwelling consists of the home itself, any built-in appliances (like your HVAC or furnace), and any structures attached to the home (like a garage, fence, or porch).
Personal belongings inside the house (like clothing and furniture) and any structures that aren’t directly attached to the home are covered by different sections in your homeowners insurance policy.
Your home’s dwelling coverage is determined by the amount it would cost to completely rebuild the house at the current prices of construction and labor. Your dwelling coverage limit should reflect the home’s true replacement cost value. The replacement cost of your home depends on multiple factors, including:
The cost of construction and labor in your area
The home’s square footage
Number of rooms
Age of home
Number of stories
Keep in mind that construction and labor costs can fluctuate, especially in the wake of a natural disaster, so it’s worth considering extended replacement cost dwelling coverage if this option is available through your insurer. This coverage comes at an additional cost, but the coverage benefits make it a worthwhile add-on.
Extended replacement cost works like this: If your home is damaged or destroyed and rebuild costs are higher than the dwelling coverage limit in your policy, your policy limit is automatically increased an additional percentage amount (usually 20–25% of your dwelling limit).
If you own a condo, the amount of dwelling coverage that you will need in your condo insurance policy will depend 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.
Bare walls coverage covers the structure of the condo building and damage to common areas and personal property that belongs to the HOA. This coverage type also usually provides minimal amounts of structural coverage for your condominium unit, protecting everything behind its walls and floors, such as the drywall, insulations, framing, wiring, and plumbing. If your HOA has this type of master policy, you’ll need enough dwelling coverage to replace the entire interior structure of your condo
Single entity coverage, also known as walls in or studs in coverage, includes all the same building and common area protection as bare walls, but coverage for the interior structure of your unit extends to the outside of the walls, top flooring, cabinets, bathroom fixtures, and any part of the unit that is unaltered as of your move-in date. If your HOA has single entity coverage, you only need enough dwelling coverage to cover unit alterations
All-in coverage is the most comprehensive type of master policy, covering the entire interior structure of your condo, including unit improvements, alterations, and appliances. If your condo association has an all-in master insurance policy, you likely won’t need to add any amount of dwelling coverage to your personal condo insurance policy
Dwelling coverage is simply one of several coverages that make up a typical home insurance policy. When you get homeowners insurance, you’re not only insuring the home itself (your dwelling), you’re purchasing coverage for your personal belongings, personal liability, and additional living expenses if a disaster forces you from your home.
To calculate your dwelling coverage limit, you’ll need to find out the home’s replacement value. Most insurers calculate the dwelling limit on your behalf when they provide you with the initial quote. For a more accurate rebuild estimate, contact a licensed appraiser in your area.
If you plan on taking out a mortgage on a home, your lender will require you to purchase homeowners insurance before extending you the loan. The most crucial component of every homeowners insurance policy is dwelling coverage, the section of the policy that financially protects the physical structure of the home.
There are eight different types of homeowners insurance policies for various home types and coverage needs.
Personal property coverage protects your belongings, including electronics, appliances, and anything else that you consider your “stuff.” This coverage pays to repair or replace your belongings after a covered loss.
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