What Is Dwelling Coverage and What Does It Cover?

Dwelling coverage is a fundamental component of a homeowners insurance policy, designed to safeguard the physical structure of a home. Its primary purpose is to provide financial protection against damage to the house. This coverage helps homeowners manage financial risk from unexpected events that could harm their home.

Understanding Dwelling Coverage

Dwelling coverage specifically addresses the physical structure of the house. This includes the foundation, exterior walls, roof, and other built-in elements of the home. It functions as the core protection, helping to cover costs for repair or rebuilding after a covered loss.

This protection is based on the “replacement cost” of the home, the amount required to rebuild with similar materials. This approach ensures that a homeowner can restore their property to its pre-damage condition without accounting for depreciation. The focus remains on the structural integrity of the home.

What is Covered by Dwelling Protection

Dwelling protection extends to the main house and any structures physically attached to it. This includes attached garages, decks, porches, and permanent fixtures like built-in cabinets, plumbing systems, and electrical wiring. These elements are integral to the home’s structure.

The coverage protects against common perils. These often include fire, lightning strikes, windstorms, hail, explosions, vandalism, and falling objects. Damage from the weight of snow, sleet, or ice is also covered.

What is Not Covered by Dwelling Protection

Dwelling coverage policies contain specific exclusions. Common exclusions include damage from floods, earthquakes, landslides, and sewer backups. For these perils, homeowners need to acquire separate, specialized insurance policies.

Dwelling protection does not cover damage from lack of maintenance, wear and tear, or deterioration. For instance, a roof leak due to neglected repairs would not be covered. Other parts of a homeowners policy address personal belongings within the home or liability for injuries to others on the property.

Calculating Your Dwelling Coverage

Determining the appropriate amount of dwelling coverage is important for adequate protection. This amount should be based on the estimated cost to rebuild the home, known as its replacement cost, rather than its market value or purchase price. Market value includes the land, which is not covered by dwelling insurance, and can fluctuate based on real estate trends.

Insurers consider several factors when calculating replacement cost. These include the local construction costs, prevailing labor rates, the types of materials used in the home (such as roofing and flooring), and the home’s total square footage. Unique architectural features and local building codes, which can increase rebuilding expenses, are also taken into account. Ensuring sufficient coverage helps prevent being underinsured in the event of a significant loss.