For most homeowners, buying a home is their most valuable investment. This is why a standard home insurance policy contains something called Dwelling coverage. Also known as Coverage A, Dwelling coverage protects the physical structure of the home, as well as any permanently installed fixtures and appliances.
What dwelling coverage includes
Dwelling coverage will pay to repair or replace your home if it is damaged by a covered loss, such as a fire or fallen tree. The following parts of your home are typically covered by the Dwelling part of your home policy:
- Structure/frame of home
- Roof
- Chimney
- Attached structures (e.g., garage, front porch)
- Permanently installed fixtures (e.g., flooring, cabinets)
- Built-in appliances (e.g., furnace, hot water heater)
When you get a home insurance quote, Dwelling coverage will already be factored into it. That’s because it is one of the six coverages that comes standard with any home insurance policy. Due to the value of your home, Dwelling may be the most important of all the standard coverages.
Here are the coverages that are automatically included in your home insurance policy:
| Standard Coverage Type | Also Known As |
| Dwelling | Coverage A |
| Other Structures | Coverage B |
| Personal Property | Coverage C |
| Loss of Use | Coverage D |
| Personal Liability | Coverage E |
| Medical Payments | Coverage F |
Dwelling – Pays to repair damage to your home caused by fire and other covered perils. This includes all parts of your home’s structure, from the walls and roof to built-in elements such as cabinetry.
Other structures – Pays to repair or rebuild any detached structures on your property, such as garages, sheds or gazebos.
Personal property – Covers your personal possessions. Examples include furniture, appliances, TVs, computers, clothing and some jewelry.
Loss of use – Reimburses you for temporary housing, meals and other related expenses while your home is being repaired after a covered loss. Also known as Additional Living Expenses coverage.
Personal liability – Your insurer will defend you or a member of your household if you’re found responsible for a loss suffered by another person. They could also pay for any damages.
Medical payments – Helps protect you if others are injured on your property. This coverage will take care of their medical bills whether or not you are responsible for your guest’s injuries.
Covered home perils
Dwelling coverage pays to replace or rebuild damage caused by a wide range of perils. While covered perils vary by state, here are the perils that are typically covered by your home insurance:
- Lightning strikes
- Wind
- Hail
- Falling objects
- Weight of ice or snow
- Vandalism
- Theft
What dwelling coverage does not include
Of course, Dwelling coverage doesn’t cover every possible loss that could affect your home. Here are some things it does not cover:
- Damage caused by flooding. If you live in an area prone to flooding, you’ll need to buy a separate flood insurance policy to be protected.
- Damage caused by wear and tear. Fixtures and appliances that fail due to mechanical breakdown or wear and tear are not covered by Dwelling coverage.
- Damage caused by earthquake. You’ll need to buy a separate earthquake policy to be covered in this case.
Here is some additional information that you might find helpful:
Like many types of insurance, Dwelling coverage is subject to limits and deductibles. But how do you know if the Dwelling coverage limit stated on your home insurance policy is enough?
The answer to that question depends on how much it would cost to rebuild your home after a total loss at today’s prices. This is also known as the replacement cost. Your independent insurance agent or a local builder can help you determine that figure, so you may want to ask them for help.
Whatever the overall replacement cost is, make sure the Dwelling limit is enough to cover it. For example, if the cost to rebuild your home from scratch is approximately $385,000, consider setting your Dwelling limit at $400,000 for a comfortable buffer.
If you’re a renter, you don’t need Dwelling insurance, as landlord is responsible for insuring the building’s structure.
If you own a condo, you do need Dwelling insurance. The amount that you need depends on what type of master policy your condo association has. Also, if you ever need to file a claim, make sure you have copies of the association’s policy as well as the association’s bylaws. These documents will define exactly what you’re responsible for in your particular unit.
