What Is Dwelling Coverage?

Dwelling Coverage, sometimes called Dwelling Insurance, is insurance that protects the physical structure of your home from damage or destruction.

Now, there’s a good chance you’re wondering how that differs from Homeowners Insurance, and the answer is, it doesn’t (technically); Dwelling Coverage is a component of a Homeowners Insurance policy. 

In this article, we’ll explain what Dwelling Coverage is, how it works within Homeowners Insurance, and how much of it you might need.

What does your dwelling mean?

Your “dwelling” is the physical building or structure you live in. To clarify, let’s consider Dwelling Insurance in relation to Homeowners Insurance.

Homeowners Insurance is actually a package of multiple coverages combined to protect your home. It usually includes coverage like:

• Dwelling Coverage: Protects the physical structure of your home.

• Other Structures Coverage: Protects additional structures on your property separate from your main home.

• Personal Property Coverage: Protects certain personal belongings within your home.

Dwelling Coverage is included in almost all types of home insurance, although its coverage differs depending on what type of home you have. If you live in a standalone home, for example, Dwelling Coverage will protect the building’s interior and exterior since the entire building is yours; if you live in a condo, it might only cover the interior of your specific unit.

What does Dwelling Insurance cover?

Dwelling Coverage can help with the costs of repairing your home if it's damaged by certain “perils”, or situations. Examples of typically covered perils include damage or destruction resulting from:

• Fire

• High winds

• Tornado and hurricane damage

• Hail

• Explosions

• Theft

• Vandalism

• Falling objects

• Vehicular impacts, such as from cars or even aircraft

Here’s an example of how Dwelling Insurance works: Let’s say part of your home’s roof is ripped off in a major storm. You’d file a Home Insurance claim, wait for an adjuster to arrive and assess the damage, and then you’d find a contractor to repair your roof. Once the work is complete and your home is restored, your Dwelling Coverage will reimburse some or all (depending on your coverage) of the repair cost. 

Another related aspect of Home Insurance is what’s called Additional Living Expense (ALE) Coverage. If your home is unlivable after damage or destruction from a covered peril, an ALE provision reimburses the cost of temporary living accommodations—hotel or other rental fees, the cost of food and essentials, etc.

What isn’t included in Dwelling Coverage?

As with all insurance coverage, there are a few situations that aren’t covered. These typically include:

• Flood damage

• Earthquake damage

• Normal wear and tear

• Neglect or intentionally caused damage

• Insect or animal infestations

• Damage caused by war, nuclear accidents or terrorist activity

It’s important to note that Dwelling Coverage only protects the structure of your main home—it is not intended for other buildings on your property, like barns and sheds. For damage to those, you’d need Other Structures Coverage.

How to calculate Dwelling Coverage

Insurance providers use several factors to calculate the amount of Dwelling Coverage in a Homeowners Insurance policy. Some major factors include a home's:

• Square-footage
• Age
• Construction type
• Building materials
• Interior or exterior upgrades
• Location

It’s important for homeowners to review this information periodically. Additionally, changes in the economy and inflation can greatly impact replacement costs, and you’ll want to make sure your Dwelling Insurance always reflects the current market. Meet with your representative periodically to update your Home Insurance policy.

How much Dwelling Coverage do I need?

Whether you’re a current homeowner reviewing your policy or are in the market for a new home, keep an eye on two things:

• Dwelling Coverage limits: The maximum a policy will pay to repair or rebuild your home.

• Policy deductibles: How much you’ll pay out-of-pocket for repairs before your coverage kicks in.

If you’d like to know more about your own home’s Dwelling Coverage, talk to your insurance agent today—they can provide you with coverage options that can help you determine your specific needs and answer any questions.

Updated 5-21-24