What Is Dwelling Insurance?

Dwelling insurance, also known as dwelling coverage or Coverage A, is the portion of your homeowners policy that pays for the repair or rebuilding of your home after it has been damaged by a covered peril, such as fire. Dwelling coverage extends to any attached structures, such as a garage or porch, as well as built-in appliances, such as a water heater, if they are damaged in the same way as your home.

What Does Dwelling Mean?

Your dwelling is the structure in which you live. In terms of your homeowners insurance policy, the definition of a dwelling includes all structures attached to your home (such as a garage, fence, or deck), as well as built-in appliances (such as a furnace or water heater).

A traditional homeowners policy considers detached garages, sheds, and other similar structures to be part of your dwelling. However, if you have a renters' policy (called a HO-4 policy) or a condominium policy (called a HO-6 policy), those structures will not be covered because you are likely not the sole owner of that property.

Parts of your condo are shared with other owners if you own one. To determine which parts of the dwelling are your responsibility to insure and which are covered by the master policy, review your condominium association's master insurance policy. When purchasing homeowners insurance, make sure to obtain a comprehensive list of what you must insure and submit it.

What Does Dwelling Insurance Cover?

Dwelling coverage varies between insurance policies and regions, so check your personal policy's declaration page to see what you're covered for. Under dwelling coverage, most homeowners insurance policies cover the following perils:

• Theft
• Vandalism
• Fire and smoke damage
• Explosions (check if your policy excludes terrorism)
• Lightning strikes
• Hail damage
• Wind damage
• Damage due to the weight of snow, sleet or ice
• Burst pipes
• Falling objects, including aircraft
• Motor vehicle collisions

Structures such as sheds and detached garages are likely covered under your homeowners insurance policy if you own a traditional home. However, renters and condo owners are unlikely to be covered because these structures are not their personal property.

What's Not Covered by Dwelling Insurance?

Despite offering reasonably comprehensive coverage, most home insurance policies exclude flooding, earthquakes, sinkholes, and sewage backups. They also do not cover damage caused by your failure to perform routine maintenance, such as ignoring a dry-rot problem. You can get coverage for some of these perils by adding a rider to your homeowners insurance policy. Finally, your policy may exclude foundation cracks caused by settling but cover other foundation damage, such as damage caused by an explosion.

Your homeowners insurance policy will include deductibles and limits in addition to any exclusions. For example, if your chimney flue was closed and caused $1,500 in smoke damage to your home, but your dwelling coverage has a $1,000 deductible, your insurance provider will only pay $500.

How Much Dwelling Coverage Do I Need?

If your home and its attached structures are completely destroyed by a covered peril, your coverage amount should be sufficient to pay for rebuilding. Don't assume that this sum is the same as the purchase price or the home's current market value. The cost of replacing your home will be determined by several factors, including:

• Construction and labor costs in your area
• The square footage of your home
• Any customized features
• The house's design (such as a ranch or colonial home)

Get a professional appraisal of your home to get an accurate estimate of how much dwelling coverage you need under your homeowners insurance policy. Your insurance company may send an appraiser to evaluate your home, but if your homeowners policy includes an Insurance Appraisal Clause (which most do), you may also hire an independent appraiser. This may be worthwhile if you believe the insurance company's estimate is excessively high or excessively low.

What is HO-6 Dwelling Coverage?

An HO-6 policy is similar to a standard homeowners insurance policy, but it is designed specifically for condominiums. It covers the same items as other homeowner policies, such as furniture, televisions, and clothing. The dwelling portion of the policy, on the other hand, differs from a standard policy because most condo owners do not own all of the ancillary structures attached to their building. The master insurance policy of your condo association will provide one of two types of coverage, which will determine the additional coverage you may need to purchase.