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What is dwelling coverage & how much do you need?

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 1600Kara McGinley

By

Pat Howard

Pat Howard

Managing Editor & Licensed Home Insurance Expert

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

Kara McGinley

Senior Editor & Licensed Home Insurance Expert

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.

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By

Britta M. Moss

Britta M. Moss

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. 

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What is dwelling coverage?

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.

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What parts of my home are protected by dwelling insurance?

Dwelling coverage protects the following parts of your home:

Home

Home

  • Built-in fixtures like sinks, tubs, showers, and cabinets

  • Built-in appliances like your furnace and water heater

  • Attached garage

  • Porch and deck

Personal belongings inside your home and any structures that aren’t directly attached to your home are covered by other sections of your homeowners insurance policy.

What does dwelling insurance cover?

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. 

Here are a few policy exclusions not covered by dwelling insurance:

If your home is damaged by one of the above circumstances, you won’t be able to file a claim — unless you purchased additional coverage. 

Examples of types of damage covered by dwelling insurance

Although you’ll likely have an open perils policy, you can expect dwelling insurance to cover the below types of damage. 

Can I add coverage for excluded perils?

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.

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How much does dwelling coverage cost?

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.

State

Average monthly cost

Average annual cost

Alabama

$172

$2,063

Alaska

$120

$1,446

Arizona

$158

$1,897

Arkansas

$283

$3,391

California

$130

$1,565

Colorado

$208

$2,496

Connecticut

$131

$1,571

Delaware

$82

$980

District of Columbia

$96

$1,154

Florida

$220

$2,643

Georgia

$166

$1,988

Hawaii

$40

$486

Idaho

$114

$1,363

Illinois

$171

$2,053

Indiana

$170

$2,045

Iowa

$153

$1,830

Kansas

$263

$3,159

Kentucky

$225

$2,705

Louisiana

$227

$2,719

Maine

$92

$1,103

Maryland

$144

$1,733

Massachusetts

$115

$1,382

Michigan

$143

$1,712

Minnesota

$164

$1,966

Mississippi

$243

$2,919

Missouri

$240

$2,876

Montana

$231

$2,778

Nebraska

$381

$4,567

Nevada

$103

$1,239

New Hampshire

$81

$974

New Jersey

$77

$926

New Mexico

$149

$1,792

New York

$99

$1,186

North Carolina

$140

$1,678

North Dakota

$159

$1,908

Ohio

$132

$1,586

Oklahoma

$361

$4,331

Oregon

$79

$943

Pennsylvania

$109

$1,303

Rhode Island

$122

$1,470

South Carolina

$149

$1,793

South Dakota

$202

$2,426

Tennessee

$211

$2,526

Texas

$257

$3,080

Utah

$79

$949

Vermont

$87

$1,046

Virginia

$126

$1,516

Washington

$107

$1,280

West Virginia

$125

$1,499

Wisconsin

$101

$1,211

Wyoming

$133

$1,599

Dwelling insurance cost by company

Below is how much $300,000 in dwelling insurance costs on average with the top 10 largest home insurance companies in the nation. 

Company

Average annual dwelling insurance cost

State Farm

$2,039

Allstate

$1,596

USAA

$1,432

Travelers

$1,568

Nationwide

$1,955

Chubb

$1,922

American Family

$1,491

Progressive

$2,618

Erie

$1,346

Auto-owners

$1,283

How much dwelling insurance do I need?

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.

Calculate how much dwelling coverage you need

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Can I purchase more dwelling coverage?

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.

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.

Type of policy

Who it's for

How dwelling coverage works

HO-1 policy

Homeowners

Protects your home against 10 named perils listed in your policy at its actual cash value

HO-2 policy

Homeowners

Protects your home against 16 named perils listed in your policy at its replacement cost value

HO-3 policy

Homeowners

Protects your home against all risks except those exclusions listed in your policy at its replacement cost value

HO-4 policy

Renters

Doesn't include dwelling coverage — that's your landlord's responsibility with a rental property insurance policy

HO-5 policy

Homeowners

Protects your home against all risks except those exclusions listed in your policy at its replacement cost value

HO-6 policy

Condo owners

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

HO-7 policy

Mobile homeowners

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

HO-8 policy

Homeowners with older high-risk homes

Protects your home against 10 named perils listed in your policy at its actual cash value

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Frequently asked questions

What does dwelling mean?

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

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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

editorial standards.
  1. National Flood Services

    . "

    Estimated Flood Loss Potential

    ." Accessed May 27, 2022.

Authors

Managing Editor & Licensed Home Insurance Expert

Pat Howard

Managing Editor & Licensed Home Insurance Expert

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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.

Senior Editor & Licensed Home Insurance Expert

Kara McGinley

Senior Editor & Licensed Home Insurance Expert

gray linkedin icon link

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.

Expert reviewer

Property & casualty claim consultant and expert witness

Britta M. Moss

Property & casualty claim consultant and expert witness

gray linkedin icon link

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. 

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