A man makes repairs to his house or dwelling.

Dwelling Coverage

What You Need to Know

You've heard of homeowners insurance, but what about dwelling coverage? What is it, and do you need it?

Dwelling coverage is part of your homeowners insurance. You likely already have it in place. That’s the good news! The bad news is, if you don’t understand the details of your homeowners insurance (like many people), your dwelling coverage may fall short if something happens to your home. It’s time to learn the basics so you have the right amount and type of coverage.

It All Starts with Dwelling Coverage

Dwelling coverage is the portion of homeowners insurance that helps cover repairs or replacement of your house if it’s damaged by a covered event. It includes coverage for attached structures, such as an attached garage or deck.

Dwelling insurance is referred to as Coverage A under a homeowners policy. Homeowners insurance for a single family dwelling typically includes the following coverages:

Dwelling Other Structure Personal Property/Contents Loss of Use Personal Liability Medical Payments to Others
Coverage A Coverage B Coverage C Coverage D Coverage E Coverage F
Protects your home and attached structures, including your garage and deck. Helps cover structures not attached to your house, such as a fence, shed, pool or detached garage. Coverage for your belongings — furniture, clothes, electronics, etc. This helps cover additional living expenses if you need to stay somewhere else while your house is being repaired. Liability coverage for property damage and bodily injury to others on and off your property. (Your child hits a ball through a neighbor’s window or your fire pit causes damage to a neighbor’s house, etc.) Helps cover medical bills if someone is injured on your property.

The above types of coverage generally apply if you live in a condo as well. If you rent your home, homeowners insurance does not include dwelling protection since you don’t own the structure. But, make sure you look at your policy so you know your specific coverage entitlements.

Coverage Amounts

The dwelling coverage amount of your homeowners insurance is the amount necessary to repair or replace your house and attached structures. When you’re choosing your coverage amount, it needs to be enough to pay the cost to repair or replace your damage or destroyed home with materials of the same kind and quality. Keep that in mind.

For example, if you have an older home with hard-to-find woodwork and built-in features, it may cost more to replace it than you’d think. The same is true for any custom work. The amount to rebuild your home is not the same amount as the market, appraised or assessed value of the home.

Other portions of coverage are typically a percentage of this overall amount. The percentage can vary by insurance companies; here is a general range.

  • Dwelling coverage - 100% of cost to rebuild
  • Other structure coverage – 10% of dwelling coverage
  • Contents coverage – 50-70% of dwelling coverage
  • Loss of use coverage – 30% of dwelling coverage, or listed as a term such as 12 or 24 months, or actual loss sustained.

You choose the coverage amounts for personal liability and medical payments, as opposed to it being a percentage of the face amount.

  • Personal liability – Choose your coverage amount, such as $100,000 or $300,000
  • Medical payments – Select your coverage amount, such as $1,000, $2,000, $5,000 or $10,000

Policy Endorsements

Sometimes, you need additional coverage. Depending on your situation, you may want to add the following extra protection.

  • Extended dwelling coverage: Increasing this portion of insurance can help cover extra dwelling costs. For example, perhaps the cost of lumber to rebuild your home is much higher than when you chose your face amount. You may have the option to add an additional 25% of the face amount in coverage.
  • Other structures: Sometimes, 10% of your face amount may not be not enough to cover other structures not attached to your house. Let’s say you have a very large custom garage or elaborate pool. If it will cost more to rebuild it, you should consider additional protection.
  • Personal contents: Certain types of items – art, jewelry, sports equipment, electronics, collections and more – are covered up to a specific dollar amount. Depending on your belongings, that amount may not cover the replacement cost. You can add endorsements for extra coverage for the full value.

Covered Events

Your dwelling protection and homeowners insurance covers several types of events and disasters. Here are typical examples:

  • Lightning
  • Windstorm and hail
  • Explosions
  • Fire
  • Smoke
  • Theft
  • Vandalism
  • Aircraft
  • Riot or Civil Commotion
  • Falling objects

Non-covered Events

There are also things that aren’t generally covered under your homeowners policy. Talk to your agent about adding coverage for these items as you deem necessary.

Know Your Policy

You’ve worked so hard for everything you have; the right coverage is imperative. The first step is knowing exactly what you currently have. Look at your declarations page (some people call it a summary page). It should show the various coverage amounts for your homeowners policy, including dwelling protection. Look at the limits, the types of coverage and deductible amounts.

Talk With an Agent

Next, rely on the expertise of an insurance agent. They can go through your current policy with you to explain exactly what you have coverage for and help identify possible gaps. After all, you don’t know what you don’t know! If you face a claim, you’ll have enough to deal with. You deserve to know that your dwelling coverage and overall homeowners insurance is set up properly to help you recover.

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