What Is Dwelling Insurance Coverage?

Dwelling coverage sometimes called “dwelling insurance” is the part of your homeowner’s insurance policy that may help pay for the rebuilding or the repair of the physical structure of your home if it’s damaged by a covered hazard. Here’s a look at what dwelling insurance covers, what types of perils and structures are not covered, and how deductibles and limits work if you have to make a claim on your dwelling insurance.

According to the Insurance Information Institute, there are certain hazards, or perils, that are covered by most standard homeowners insurance policies. While the coverage can vary from state to state or from one geographical region to another, homeowners policies typically help cover damage from the following events:

  • Fire/smoke
  • Lightning strikes
  • Windstorms
  • Hail
  • Explosion
  • Vandalism
  • Theft
  • Damage caused by the weight of snow, sleet, or ice
  • Falling objects
  • Damage from an aircraft
  • Damage from a motor vehicle

While these hazards are typically covered by dwelling insurance, you should always check your own homeowner’s insurance policy to determine what it covers.

A standard homeowners insurance policy typically does not cover floods, earthquakes, sewer backups, or damage that occurs from a lack of maintenance. You may be able to buy additional coverage or a separate insurance policy to help cover some of these additional perils. For example, you may be able to add water backup coverage to your existing homeowner’s insurance policy to help cover sewer backups. Or, you may be able to buy flood insurance to help protect your home against flooding. Talk to your insurance agent to find out what options are available to you.

The dwelling coverage in a homeowners policy is different than the building property protection in a condo insurance policy. If your condo is damaged by a covered peril, building property protection helps pay for repairs to the walls of your condo unit and its interior. Your condo association’s insurance policy may help cover other parts of the building, such as the roof, elevator, basement, courtyards, or walkways.

Although a lot of people think of their dwelling as just the physical structure that they live in, dwelling coverage may help protect more than that. Dwelling insurance typically helps cover the home you live in plus attached structures. What this means is that a structure like your garage may also be covered by dwelling insurance, as long as the garage is attached to your house.

If damage to an attached structure occurs as the result of a covered hazard, your homeowner’s insurance may help cover the costs to repair or rebuild it. If it’s attached to your home, a deck or front and back porch may also be considered a part of your dwelling, and therefore may be covered by the dwelling coverage in your homeowner’s insurance policy.

If you have a structure on your property that isn’t connected to your home and doesn’t qualify as part of your dwelling — like a detached garage, fence, or shed — it is likely not protected by dwelling coverage. Instead, the other structures coverage on your homeowner’s insurance policy may help cover damage to these detached structures on your property.

Dwelling coverage is usually subject to limits and deductibles

Your limit is the maximum amount that your homeowner’s insurance policy will pay toward a covered loss. Your deductible is the amount you’ll pay out of pocket toward a covered claim.

When you buy homeowners insurance, you choose your dwelling coverage limit. That limit should be based on the cost of rebuilding your home (not necessarily the market value of the home). Most home insurance policies come with replacement cost coverage for the structure of your home.

Your dwelling coverage limit may influence other coverage limits within your home insurance policy. Your other structures coverage limit is typically a percentage of your dwelling coverage limit — 10 percent, for example. So, if you had a dwelling coverage limit of $500,000, your other structure’s coverage limit would be $50,000.

Read your policy documents to learn what your limits and deductibles are. Your insurance agent can help you adjust them to fit your needs.

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