Dwelling coverage

Dwelling coverage is the part of your homeowners insurance policy that protects the structure of your home. It’s also called Coverage A and is one of the most important parts of your home insurance policy. If your house is damaged or destroyed by a covered event, dwelling coverage helps pay to repair or rebuild it up to the limits listed in your policy.

Many people think of home insurance as protecting their belongings or helping in emergencies. While those are important, the foundation of your home insurance protection starts with the dwelling itself. That’s where dwelling coverage comes in.

What does dwelling coverage include?

Your home is more than just four walls; it’s the roof over your head and everything built into it. That makes dwelling coverage one of the most valuable parts of your homeowners policy. That’s why knowing what it covers can help you feel more secure in your protection.

Dwelling coverage helps pay to repair or rebuild the main structure of your home if it's damaged by a covered peril. It typically includes:

• The physical structure – Foundation, walls, roof and other load-bearing parts of the house are repaired using this coverage.
• Attached structures – Garage, deck, porch or anything physically connected to the home are covered by dwelling coverage.
• Built-in appliances – Furnace, water heater and central air systems are covered.
• Essential systems – Plumbing, electrical, HVAC and more are considered covered systems.

Your dwelling coverage applies only when the damage is caused by risks listed in your policy, called covered perils. Common ones include:

• Fire and smoke
• Windstorms and hail
• Lightning strikes
• Vandalism or theft
• Falling objects
• Weight of snow or ice
• Sudden and accidental water damage

However, dwelling coverage usually does not include:

• Floods or earthquakes – These require separate policies.
• Neglect or wear and tear – Gradual damage isn’t covered.
• Detached structures – Fences, sheds and guest houses fall under Coverage B.

How much dwelling coverage do I need?

To avoid being underinsured, your dwelling coverage limit should reflect your home’s replacement cost, not its market value or purchase price. This is the amount it would cost to rebuild your home with similar materials at today’s construction rates.

Why does this matter? Because land costs, location and real estate trends affect market value, but those don’t factor into how much it costs to rebuild. Dwelling coverage only pays for the structure itself.

Several factors go into calculating your replacement cost:

• Square footage
• Local labor and material costs
• Construction type – Brick, wood, siding, etc.
• Design and layout
• Unique features – Fireplaces, vaulted ceilings, custom woodwork

Your insurance carrier may use a rebuild cost calculator, but you can also consult a contractor or appraiser if you want extra peace of mind.

Replacement cost vs actual cash value

Your policy may pay for damage using either replacement cost or actual cash value (ACV). These are two very different approaches to coverage. Knowing how they work can make a big difference in what you get back after a claim.

• Replacement cost – Covers the full cost to rebuild with similar materials, without subtracting for age or wear.
• Actual cash value – Subtracts depreciation, meaning you may get less than what it costs to fully repair or rebuild.

Most home insurance policies default to replacement cost, but it’s worth confirming. If you only have ACV coverage, upgrading can give you stronger protection.

What is extended or guaranteed replacement cost?

Home construction costs can spike quickly, especially after a natural disaster. That’s why some policies offer optional coverage that adjusts your limit. These extra features help make sure you’re not left short when rebuilding.

• Extended replacement cost – Adds 10% to 25% more to your dwelling limit in case prices rise
• Guaranteed replacement cost – Pays to rebuild your home completely, no matter the cost

These options offer extra peace of mind, especially if you live in a high-cost or disaster-prone area.

Understanding Coverage A in home insurance policies

Coverage A is the official name for dwelling coverage in your homeowners insurance policy. It’s the core protection for your home’s structure. Everything else in your policy builds from this coverage.

If you’ve renovated, added square footage or just haven’t looked at your policy in a while, now’s a great time to check if your Coverage A limit still fits your home.

What is not covered under dwelling coverage?

Dwelling coverage is powerful, but not all-encompassing. It’s important to know where its limits stop so you can plan for what isn’t included. That way, you won’t be surprised by exclusions after a claim.

Common exclusions include:

• Flood or earthquake damage
• Pest, mold or neglect-related damage
• Sewer backups (unless you add special coverage)

So if you’re wondering, “What does dwelling coverage include in homeowners insurance?” the best answer is: structural damage from sudden, accidental events. Not gradual wear or anything excluded from your base policy.

Difference between dwelling coverage and personal property coverage

It’s easy to confuse these two, but they cover very different things. One protects your home’s structure, and the other protects your belongings. Understanding both helps ensure you’re fully covered.

• Dwelling coverage repairs or rebuilds your home’s structure
• Personal property coverage protects what’s inside your home

Picture this: if a kitchen fire damages the walls and cabinets, that’s dwelling coverage. If it also ruins your dining table or microwave, personal property coverage would step in.

How to keep your dwelling coverage up to date

Your home won’t stay the same forever, and your coverage shouldn’t either. Making updates to your policy helps keep up with changes in your home and the market. It also makes sure that your limits still match your needs.

Review your policy annually or after:

• Renovations or upgrades
• Local construction cost changes
• New building codes or permit changes

Some policies include inflation protection, which automatically adjusts your dwelling limit. Ask your insurance advisor if that feature is built into your policy.

 

Dwelling coverage is the backbone of your homeowners insurance. It helps rebuild your home after disaster strikes, keeping your foundation (literally) strong.

By understanding what Coverage A includes, what it leaves out and how to calculate the right amount, you can feel confident that your policy is set up to protect what matters most.

At VIU by HUB, we make insurance clearer, friendlier and tailored to your life. If you want help reviewing your dwelling coverage or adjusting your limits, our team is here to help, with advice that’s easy to understand and act on.