Dwelling Coverage (Coverage A) in Homeowners Insurance: A Guide for Consumers

Your homeowners insurance policy has several components. One of the most important is dwelling coverage, which provides a significant amount of protection. Learn more about dwelling coverage and why every homeowner should have it.

Definition of Dwelling Coverage

Coverage A is the part of your homeowners insurance policy that covers your home’s structure ^[1]. It may pay to repair or replace the following:

• Frame
• Foundation
• Roof
• Walls
• Electrical and plumbing systems
• Furnace
• Central air conditioning systems
• Built-in appliances
• Permanent fixtures (e.g., built-in bookcases, paneling, and cabinets)

Coverage A is the foundational component of your homeowners insurance policy. You can protect yourself even further by combining dwelling coverage with liability insurance, contents coverage, other structures coverage, and medical payments coverage.

Property and casualty insurance expert Kristopher Kane reminds homeowners to consider what they’re really insuring.

Expert Take

Your home is more than just four walls and a roof. For most people, it’s a refuge and a place where they’ve made treasured memories. That’s why this kind of coverage is so crucial. It’s not just about covering repairs. It’s about restoring the place you call home.

Kristopher Kane – Full-time Freelance Writer

Coverage and Limitations

Coverage A only pays to repair or replace damaged structures if the damage occurs due to a covered peril [2]. Depending on the type of policy you have, your insurance company may cover damage caused by the following:

• Fires
• Explosions
• Hailstorms
• Vandalism
• Falling objects
• Weight of ice and snow

If you’re not sure what your policy covers, check your declarations page.

Structural Components Covered

Dwelling insurance covers the main structure of your home and any built-in systems or fixtures. The basic structure of a home includes the roof, walls, frame, and foundation. Your policy may also cover your stove, over-the-stove microwave, or dishwasher. These appliances are affixed to the wall with bolts or screws, which is why they aren’t treated the same as other appliances.

Kane stresses the importance of this kind of coverage.

Expert Take

Coverage A is typically required by mortgage lenders as a condition of a home loan, but this isn’t the only reason every homeowner should have it. One of your top priorities should be protecting the investment you’ve made against any unforeseen harm. With dwelling coverage, you have an added layer of protection specifically for the structure of your home. It’s not just coverage; it’s peace of mind.

Kristopher Kane – Full-time Freelance Writer

Note that you may need to purchase additional coverage for high-end appliances. This extra coverage is known as an endorsement. Insurers also offer endorsements for jewelry, original artwork, and other high-value items.

Separate Structures Coverage

Coverage A is only for the main structure of your home. Other structures coverage, also known as Coverage B, pays to replace or repair any detached structures on your property, including:

• Gazebos
• Sheds
• Carports
• Detached garages
• Detached patios
• Mailboxes
• Barns

Some insurers include in-ground swimming pools with Coverage A, while others treat them as separate structures protected by Coverage B. If you have an in-ground pool, your insurance company may classify it as an “attractive nuisance.” This is a dangerous condition that’s particularly attractive to children or teenagers. Your insurer may require you to put a fence around your in-ground pool before agreeing to cover it.

The limit for Coverage B is a percentage of your dwelling coverage limit. For example, if you have $250,000 worth of Coverage A, you may have a $25,000 limit (10%) on your other structures coverage.

Exclusions and Limitations

Dwelling coverage is only for the structure of your home, including permanent fixtures and built-in appliances. It doesn’t cover the contents of your home, damage to detached structures on your property, or medical payments for any injuries sustained in your home. For example, if a covered peril destroys your home entertainment system, you can’t use your dwelling coverage to replace it. You’d have to use your contents coverage.

Additionally, Coverage A typically doesn’t protect you against:

• Flooding
• Sinkholes
• Sewer backups
• Earthquakes
• Construction defects
• Normal wear and tear
• Damaged caused by poor maintenance

If you live in a flood zone, your mortgage company may require you to purchase separate flood insurance. Even if you don’t have a mortgage, you can still buy flood insurance to protect your investment. The National Flood Insurance Program offers up to $250,000 in coverage for your dwelling and $100,000 in coverage for the contents of your home [3]. If you need higher limits, consider purchasing flood coverage from a private insurer.

You may also be able to purchase a separate earthquake insurance policy to cover damage arising from earth movement [4]. This type of policy typically covers earthquakes, sinkholes, and mudslides. Some insurers even offer add-on coverage for sewer backups. Add-ons, also known as endorsements, give you extra protection beyond what’s covered in your standard homeowners insurance policy.

Determining Coverage Limits

Before you purchase a homeowners insurance policy, it’s important to understand the difference between actual cash value (ACV) and replacement value. ACV is the cost of repairing or replacing damaged property minus any depreciation, which is the loss of value associated with normal wear and tear. Replacement value doesn’t account for depreciation.

Dwelling coverage typically covers the replacement value of your home’s structure. This means that your insurer will pay to repair or replace a damaged structure with similar materials. If you live in an older home, you may need to purchase a modified replacement-cost endorsement. This extra coverage makes it easier to replace old-fashioned home features with modern materials.

When you purchase dwelling coverage, you’re only covered up to the limit listed on your declarations page. Before choosing a limit, think carefully about how much it would cost to replace your home in the event of a total loss. Replacement costs vary based on square footage, current labor costs, and the cost of supplies.

If you make significant upgrades to your home, you may need to increase your coverage limit. Some improvements increase the value of your home, which also increases the replacement cost.

Impact of Policy Types

The type of policy you have has a big impact on the amount of coverage available. In a named-perils policy, you’re only covered for specific perils listed on the declarations page. If structural damage arises from something that isn’t specifically mentioned in your policy, your insurance company won’t cover it.

An open-perils policy covers any peril that isn’t specifically excluded. Keep these differences in mind when purchasing homeowners insurance. It may cost more to purchase an open-perils policy, but it also gives you greater peace of mind.

An Overview of the Claims Process

If a covered peril damages the structure of your home, you’ll have to file a claim with your insurance company. Before you file a claim, however, you may have to take certain steps to prevent additional damage.

For example, if a covered peril makes a hole in your roof, your insurance company may require you to cover the hole with a tarp. If a covered peril damages your furnace, you may have to turn off the power or take other steps to prevent a fire.

Once you verify that everyone is safe and take steps to prevent additional damage, here’s what you need to do:

1. Contact your insurance company. Provide details about the incident, such as what happened and when it happened.
2. Submit photos or videos to support your homeowners insurance claim.
3. Respond quickly if your insurance adjuster contacts you.
4. Review your insurance company’s offer and decide if you want to accept it. If you think the offer is too low, you may be able to negotiate a bigger payout.
5. Cash the check and make needed repairs.

If your insurance company approves your claim, they’ll send you a check for the amount of the claim minus your deductible. A deductible is the amount of money you have to pay before your insurance starts to cover the cost of repairs. For example, if you have a $2,000 deductible, you have to pay the first $2,000 in repair costs.

Protecting Your Investment With Homeowners Insurance

Your home is one of your most important possessions, so it’s important to have adequate homeowners insurance coverage. Coverage A is the most basic aspect of a homeowners policy, as it covers the structure of your home. You’ll need to purchase additional coverage for detached structures and personal belongings, but dwelling coverage is a good start.

“Coverage A isn’t just about protecting the physical structure of your home. It’s about making sure you’re never left out in the cold,” says Kane. “One way to look at dwelling coverage is that it’s your way of protecting what protects you and your loved ones. Coverage isn’t free, but not having adequate protection is far more expensive than you’ll ever pay for an insurance policy.”

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Reviewed by Kristopher Kane

Kristopher Kane is a career freelance writer with over 15 years of experience and a broad portfolio encompassing various topics within the insurance industry. He has written for both B2B communication and consumer-level customer engagement.