Dwelling coverage is a key component of a homeowners’ insurance policy that helps to protect your home’s structure from damage.
What is dwelling coverage?
Dwelling coverage is a fundamental component of a standard home insurance policy. It serves to protect your home’s structure (walls, roof and other integral parts of your home) against a variety of hazards, such as fire, theft and certain natural disasters.
Dwelling coverage is designed to provide a financial safety net. Without enough dwelling coverage, the cost of repairs or rebuilding after a covered event could be overwhelming and create a significant financial burden.
What’s Covered by Dwelling Insurance
Dwelling insurance is designed to help cover repairs or replacements to your home and any structures attached to it, such as a deck or attached garage, after a covered loss. This includes essential parts of your home’s structure like the roof, walls and ceilings. For instance, if lightning damages your roof, the dwelling coverage part of your homeowners’ policy can help pay for necessary repairs or rebuilding.
Common hazards covered by dwelling insurance include fire, theft, vandalism, lightning, hail and wind, among others.
What’s Not Covered by Dwelling Coverage
While dwelling insurance covers a variety of hazards, there are some notable exclusions to coverage that homeowners need to be aware of.
As previously mentioned, dwelling coverage covers the physical structure of your home and structures that are attached to it. This means that structures like detached garages, sheds, fences and above-ground swimming pools are typically excluded from dwelling coverage.
Hazards that are commonly excluded from dwelling coverage include flood damage, damage from earthquakes or earth movement, sewer backup damage and damage due to lack of maintenance, neglect or aging of property.
Detached Structures and Other Coverages
Detached structures, such as garages, fences and sheds, are generally not included in dwelling coverage but may be covered under a separate category known as other structures coverage. This coverage is typically calculated as a certain percentage of the dwelling coverage limit in your home insurance policy.
If your belongings are stored in detached structures like garages, personal property coverage from your homeowners’ policy may protect them. Make sure to speak with your insurance advisor to ensure that all of your structures and personal belongings are covered by your home insurance policy.
How much dwelling coverage do you need?
When it comes to dwelling insurance, your coverage limit should be based on the cost to rebuild your home, also known as replacement cost – not its market value. Replacement cost is determined more by construction and labor costs than by the real estate market, and using this number can help ensure that you have enough coverage to manage the financial burden if materials and labor expenses increase significantly after a disaster.
Importance of Reviewing Your Home Insurance Policy
Annually reviewing your personal insurance policies, including your homeowners’ policy, is crucial to ensuring that your coverage continues to align with your needs. If you’ve made significant changes or renovations to your home or purchased valuable items, get in touch with your insurance advisor to ensure your coverage is up to date with your current needs.
Is your home protected?
Dwelling coverage is a crucial part of any home insurance policy, and understanding what’s covered, what’s not and how much coverage you need is essential for securing comprehensive protection.
If you’re not sure that your home and belongings are protected, Higginbotham can help. Talk to one of our personal insurance specialists to discuss your home insurance needs.
