Dwelling Insurance Coverage Guide

16 May

A standard homeowner policy protects your home, but it is made up of a variety of different parts, each one designed to protect a different section of your home or property. When it comes to the structure of your home, it is the dwelling coverage that steps up to protect your house. 

Keep reading to learn everything you need to know about the dwelling coverage section of your homeowners insurance policy:

What is dwelling coverage?

Dwelling coverage is also known as Coverage A and is one of the most important parts of a homeowner insurance policy. It will pay to repair or rebuild your home if it is damaged by a covered peril. Most homeowner policies cover the following standard perils:

  • Fire and smoke
  • Lightning strikes
  • Windstorms and hail
  • Explosion
  • Vandalism and malicious mischief
  • Damage from an aircraft, car or vehicle
  • Theft
  • Falling objects
  • Weight of ice, snow or sleet
  • Water damage

Your dwelling coverage will cover repairs to your home or the complete rebuilding of it up to your policy limits if the damage is caused by a covered peril. Choosing the correct policy limits is very important and adjusting them as inflation and construction costs rise is necessary to make sure your home is fully protected. 

What does dwelling insurance cover?

The dwelling coverage portion of your homeowners policy will protect the actual structure of your home. It doesn’t provide protection for your possessions or any additional structures on your property such as barns, sheds and outbuildings, those are all protected by other sections of the policy. 

Dwelling coverage is also referred to as “Coverage A” and it protects your home including the foundation, framing, walls and roof. It will also pay to repair or rebuild the interior of your home and all major mechanical systems such as HVAC, sewer and water systems. Dwelling coverage will also protect any structures that are attached to your home such as a porch or an attached garage.

What type of damage is excluded from dwelling coverage?

While dwelling coverage protects against a wide variety of perils, there are some that are excluded. The following are not typically covered by the dwelling portion of a homeowners policy:

  • Flood damage: Most standard homeowner policies exclude flood damage which means you will need to carry a separate flood insurance policy to be fully protected if you live in an area that is prone to flooding. Flood insurance can be purchased through the National Flood Insurance Program (NFIP) or private insurance companies. We can help you shop the best flood insurance rates online, give us a call now at 1-888-620-1954.
  • Earthquake damage: Just like flood damage, earthquake damage is excluded from most standard homeowner policies. If you live in an earthquake prone area you will need to carry an earthquake policy in addition to homeowners insurance. 
  • Maintenance: A homeowners insurance policy assumes that the homeowner will perform routine maintenance on the home while also repairing any small issues that can lead to larger issues over time. As an example, a small water leak can do major damage over the course of years. If your insurer determines that you ignored routine maintenance or didn’t repair minor issues that lead to a major problem, your claim may be denied leaving you to cover the damage. 
  • Sewer backup/Sump pump coverage: In most cases, sewer backup and sump pump coverage are excluded from a standard policy, but coverage can be added as an endorsement on the policy. Sewer and sump pump damage can quickly become very expensive and sewer coverage is very affordable which is why most industry experts recommend adding it to your policy.

How much dwelling coverage should I carry?

When it comes to how much dwelling coverage you should carry, you need to determine your replacement cost coverage (RCC) which is often dramatically different than the market value of your home. RCC is what it would cost to rebuild your home with similar quality materials, 

The easiest way to determine your RCC is to check with your insurance agent. They have access to RCC information that will help them calculate your RCC. There are also plenty of calculators on the internet that can help you determine your RCC. 

One final way to calculate your RCC is to check with a local contractor regarding cost per square foot to build in your general area and then multiple that figure by the square footage of your home. This will be the least accurate method but should give you a ballpark figure. Click to Calculate Your Dwelling Coverage

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