What Is Coverage A (Dwelling) in Homeowners Insurance?

Homeowners insurance provides crucial financial protection for property owners, safeguarding against unexpected events that can cause damage to a significant investment. A standard homeowners insurance policy is typically structured into distinct sections, each designed to cover specific aspects of a property. Among these, “Coverage A,” commonly known as Dwelling Coverage, stands out as the primary component dedicated to protecting the physical structure of the home itself.

What Coverage A Protects

Dwelling coverage focuses specifically on the physical structure of your house and any structures permanently attached to it. This includes fundamental elements like the foundation, exterior and interior walls, and the roof. Built-in components such as plumbing, electrical wiring, central heating and air conditioning systems, and fixtures like cabinets are also typically included under this coverage. Structures physically connected to the main dwelling, such as an attached garage, a deck, a front or back porch, and carports, are generally covered. This coverage does not extend to the land on which the house stands or to personal belongings located inside the home.

Covered Perils

Coverage A typically protects against a range of specific events, known as perils, that can cause damage to the dwelling. Policies can be structured in two main ways: “named perils” or “open perils” (also referred to as “all-risk”). A named perils policy provides coverage only for the specific risks explicitly listed in the policy document. Conversely, an open perils policy offers broader protection, covering all causes of loss unless they are specifically excluded in the policy. Common perils typically covered under Dwelling Coverage include fire and smoke, lightning strikes, windstorms, and hail. Protection also extends to damage resulting from explosions, riots, vandalism, and theft. Other covered events often include damage from vehicles or aircraft, falling objects, the weight of snow, sleet, or ice, and sudden and accidental tearing apart, cracking, burning, or bulging of a heating or cooling system.

Determining Your Coverage A Limit

The appropriate limit for Coverage A is determined by the “replacement cost” of your home, which is the amount it would cost to rebuild the structure completely from the ground up at current material and labor prices. This figure differs from the home’s market value or purchase price, as it excludes the value of the land. Factors influencing this cost include the home’s total square footage, the type and quality of construction materials used (e.g., brick, wood, stucco), the roof type, and local labor rates. Unique architectural features, the age of the home, and its overall condition also play a role in this calculation. Insurers often use specialized software to calculate this replacement cost, incorporating data on local building expenses and comparable properties. Homeowners should regularly review and adjust their Coverage A limit, particularly after significant renovations or when construction costs in their area increase. Some policies offer “extended replacement cost” coverage, which provides an additional percentage (often 10% to 50%) above the standard limit to account for unexpected increases in rebuilding costs. A “guaranteed replacement cost” endorsement can offer even greater protection, paying the full cost to rebuild the home even if it exceeds the policy limit.

Common Coverage A Exclusions

Despite its broad protection, Coverage A has specific limitations. The value of the land on which the home sits is never covered. Detached structures on the property, such as sheds, detached garages, or fences, are typically not covered under Coverage A; instead, they fall under a separate section of the policy known as Coverage B, or “Other Structures” coverage.

Personal belongings within the home, including furniture, electronics, and clothing, are also excluded from Dwelling Coverage, as they are protected by Coverage C, or “Personal Property” coverage. Damage from natural disasters like floods and earthquakes are generally excluded and require separate, specialized insurance policies or endorsements. Damage resulting from neglect, ordinary wear and tear, or intentional acts by the homeowner is typically not covered. Other common exclusions include damage caused by war, nuclear hazard, and governmental action.