What Is Dwelling Insurance?

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Dwelling insurance, also known as dwelling coverage or Coverage A, is the portion of your homeowners policy that covers the costs to repair or rebuild your home after it's damaged by a covered peril, such as fire. Dwelling coverage includes all of your home's attached structures, such as its garage or a porch, as well as built-in appliances, such as a water heater, should they suffer damage with your home.

What Does Dwelling Mean?

Your dwelling is the building you live in. As far as your homeowners insurance policy is concerned, the definition of a dwelling extends to 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. Other structures, such as a detached garage or a shed, are considered part of your dwelling if you have a traditional homeowners policy. However, if you have a renters’ policy (also known as an HO-4 policy) or a condominium policy (HO-6 policy), those structures won't be covered, since you probably aren't the sole owner of that property.

If you own a condo, parts of your dwelling are shared with other owners. You'll need to review your condominium association's master insurance policy to determine which parts of the dwelling are your personal responsibility to insure, and which parts fall under the master policy. Make sure to get a full list of the property that falls under your responsibility to insure and submit that list when purchasing homeowners insurance.

What Does Dwelling Insurance Cover?

Dwelling coverage can vary between insurance policies and regions, so you should check your personal policy's declaration page to determine what your coverage is. However, most homeowners insurance policies cover the following perils under dwelling coverage:

  • 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 excess snow, sleet or ice
  • Burst pipes
  • Falling objects, including aircraft
  • Motor vehicle collisions

If you own a traditional home, other structures, such as sheds and detached garages, are probably covered under your homeowners insurance policy. However, these structures likely aren't covered for renters or condo owners, since these structures typically aren't their personal property.

What's Not Covered by Dwelling Insurance?

Despite providing fairly comprehensive coverage, most dwelling insurance policies exclude flooding, earthquakes, sinkholes and sewage backups. They also don’t cover any damage that’s directly caused by your own failure to carry out routine maintenance, such as a dry-rot problem you ignored. You can receive coverage for some of these perils, but you'll need to add a rider to your homeowners insurance policy. Finally, your policy may exclude cracks in your foundation due to your home settling, but it may cover other damage to the foundation, such as damage caused by an explosion.

In addition to any exclusions, your homeowners insurance policy will come with deductibles and limits that will limit coverage. For example, if your chimney flue was closed and caused $1,500 of smoke damage in your house, but your dwelling coverage is subject to a $1,000 deductible, you'll receive only $500 from your insurance provider.

How Much Dwelling Coverage Do I Need?

Your coverage amount should be sufficient to pay for rebuilding your home and its attached structures if they're totally destroyed by a covered peril. Don't assume that this amount is the same as the price you paid for the home or the home's current market value. The replacement cost of your home will depend on a number of factors, which include:

  • The cost of construction and labor in your area
  • Your home's square footage
  • Any custom-built features
  • The style of house (such as a ranch or colonial home)

To get an accurate estimate of how much dwelling coverage you require under your homeowners insurance policy, have a home appraiser evaluate your house. Your insurance provider may choose to send their own appraiser to evaluate your home, but if your homeowners policy includes an Insurance Appraisal Clause (as most do), you may also hire an independent appraiser to conduct their own evaluation. You might want to do this if you feel the insurance company's estimate is higher or lower than you believe is appropriate.

What is HO-6 Dwelling Coverage?

An HO-6 policy is similar to a traditional homeowners insurance policy, but it’s tailored specifically to a condominium. The overall policy covers the same items covered under other homeowners policies, including furniture, televisions and clothing. The dwelling portion, however, differs from a traditional policy because most condo owners don't own all of the ancillary structures attached to their building. Your condo association's master insurance policy will offer one of two types of coverage, which will dictate the additional coverage you may need.

Master Policy TypeYour Responsibilities
All In (All Inclusive)All internal and external surfaces of your condo are covered under the master policy, including attached fixtures, such as toilets and sinks. Additional upgrades may or may not be covered under this policy. Under an All In policy, you're responsible only for insuring your personal property, such as clothing and furniture.
Bare Walls InThe master policy only covers the exterior of your condo. Everything inside your dwelling, including your walls, needs to be covered under your dwelling insurance.

Mark is a Senior Research Analyst for ValuePenguin focusing on the insurance industry, primarily auto insurance. He previously worked in financial risk management at State Street Corporation.

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