What Is Dwelling Coverage?

DWELLING COVERAGE IS THE FOUNDATION OF YOUR HOME INSURANCE POLICY

Your home is made up of a variety of structures, systems, spaces, and, of course, stuff. So, it makes sense that your home insurance policy, which is designed to help you safeguard all the parts of your property, is also made up of several parts—six coverage areas, to be exact. All six coverages, which include Dwelling, Other Structures, Personal Property, Loss of Use, Personal Liability, and Medical Payments, provide homeowners with vital protection. However, it is Dwelling Coverage, often called Coverage A, that is usually considered the most critical component of your policy.

There are a couple of reasons why Dwelling Coverage forms the basis of any homeowners policy. First, it is the portion of your home insurance that includes coverage for the physical structure of your home and any attached structures, including the following:

If any of these or other similar structural elements of your house are damaged or destroyed as a direct result of a covered event, it is the Dwelling Coverage in your homeowners policy that is typically going to be activated to help you pay for related repairs, replacements, or, in a worst-case scenario, the cost to rebuild your home.

Additionally, the Dwelling Coverage amount you select generally influences the limits in your home insurance policy for other coverage areas, including Other Structures Coverage and Personal Property Coverage.

Do you have enough Dwelling Coverage?

Because Dwelling Coverage is such crucial protection for your home and may affect other coverage areas in your homeowners policy, it’s not enough to just have it—it’s also important to have the right amount.

To make sure your home has adequate Dwelling Coverage, your insurance agent typically helps you evaluate and calculate what it would likely cost to restore your home if it ever sustains extensive damage or is declared a total loss.

The factors that go into this estimate usually include:

• Your home’s square footage and architectural style.
• The type of roofing materials used.
• Any special features and improvements you’ve made since moving in.
• The costs of goods, materials, and labor that are specific to your zip code.

All of this adds up to the monetary amount it might take to rebuild your home to its original condition after a catastrophe, also called your home’s estimated reconstruction cost.

While your initial Dwelling Coverage limit will be based on your home’s estimated reconstruction cost, this is not a number to set and forget. It is very possible this limit may need to be adjusted in the future. For example, if the inflation rate rises, the price of construction materials and labor fluctuates dramatically, or you undertake a major home improvement project and your reconstruction cost is not reevaluated, your Dwelling Coverage limit may lag behind the true cost of rebuilding your home.

If you have more questions about Dwelling Coverage, it’s time to contact one of the local independent agents in The Andover Companies network. They can review your home insurance policy and its current limits, and, if needed, share some solutions that may help broaden the coverage protecting your dwelling.