Home insurance can seem overwhelming at first glance, but it becomes much easier to understand when broken down into its core components. One of the most essential elements of your policy is Coverage A — Dwelling Coverage. This coverage is the foundation of your protection, as it safeguards the structure of your home against covered risks, also known as perils.
Let’s take a closer look at what Coverage A includes, who it’s for, and how to make sure you have the right amount.
What Does Dwelling Coverage Protect?
Coverage A is designed specifically for homeowners. It covers the physical structure of your home — not just the walls and roof, but also many of the integral parts that make your home livable.
Here are some of the components typically covered by dwelling coverage (subject to your policy’s terms and limits):
-
Main structure (frame, roof, foundation, chimney)
-
Attached features such as patios, porches, and garages
-
In-ground pools (in many policies)
-
Permanently installed interior fixtures (flooring, built-in cabinetry, bathroom fixtures, countertops)
-
Built-in appliances (water heater, furnace, sump pump)
This coverage helps pay to repair or rebuild your home if it’s damaged or destroyed by a covered peril — such as fire, wind, or vandalism. After a claim is filed, your insurance company will evaluate the cause and extent of the damage to determine what is eligible for reimbursement, up to your coverage limits.
Who Needs Dwelling Coverage?
Dwelling coverage is for homeowners only. Renters typically don’t need this coverage since they don’t own the building itself — only the belongings inside, which are protected under a renters insurance policy. Homeowners, including those who own condos, need dwelling coverage to protect their property’s structure.
Types of Policies That Include Dwelling Coverage
There are different types of homeowners insurance policies, and the kind you choose affects what your dwelling coverage protects:
HO-2 Policy (Named Peril)
An HO-2 policy covers your home against a list of specifically named perils — typically 16 of them, such as fire, lightning, windstorms, and hail. This is a more limited form of coverage and is often considered basic protection.
HO-3 Policy (Open Peril)
The most common type of homeowners policy, HO-3 offers broader protection. Also called an “open peril” or “all-risk” policy, it covers your dwelling against all perils except those specifically excluded. This offers more flexibility and a wider safety net than HO-2.
How Much Dwelling Coverage Should You Have?
The amount of dwelling coverage you need is based on the cost to rebuild your home, not its market value. This includes labor, materials, permits, and local construction rates. Every home is unique, so coverage amounts can vary greatly — even for houses that appear similar.
A good estimate starts with your home’s square footage. Multiply that by the average local construction cost per square foot to get a rough idea of what rebuilding might cost.
Keep in mind:
-
HO-2 and HO-3 policies usually provide replacement cost coverage, which pays to rebuild your home without factoring in depreciation.
-
Construction costs can fluctuate with inflation, material shortages, or labor demand. It’s wise to review your policy annually with your insurance agent to make sure your coverage keeps pace.
-
Being over-insured is often safer than being under-insured when it comes to catastrophic loss.
Where to Find Your Coverage Limits
To find out your current dwelling coverage limit, check the declarations page of your policy. This page outlines all your coverage amounts, including how much you’d receive in the event of a claim.
