What Is Dwelling Coverage?

Last updated: June 29, 2023


Welcome to the world of home insurance! In this article, we delve into the topic of dwelling coverage. At its core, dwelling coverage is a part of your homeowner’s insurance policy that provides financial protection for your home’s physical structure – that is the “dwelling” itself – in the event of damage caused by a covered peril such as fire, wind, or vandalism.

If you’ve ever wondered what dwelling coverage entails and why it is crucial for homeowners, read on. 

Key Statistics about Dwelling Insurance in 2023

  • Approximately 95% of homeowners in the US have some form of dwelling insurance coverage.

  • In 2020, the average annual premium for dwelling insurance in the US was around $1,200.

  • The total value of insured residential properties in the US is estimated to be over $30 trillion.

  • Dwelling insurance claims in the US are most commonly filed for damages caused by fire, windstorms, and water-related incidents.

  • Texas, California, and Florida are among the states with the highest number of dwelling insurance policies due to their vulnerability to natural disasters.

  • According to surveys, only about 40% of renters in the US have renter’s insurance, which includes coverage for personal property within the dwelling.

  • The number of homeowners with flood insurance, a separate coverage from dwelling insurance, is relatively low, with only around 15% of US homeowners having this additional protection.

Other Key Home Insurance Components

While dwelling coverage focuses on your home’s physical structure, it’s important to note that a typical home insurance policy includes other coverages like personal property coverage, liability coverage, and additional living expenses, each serving a specific purpose.

Importance of Dwelling Coverage

Without dwelling coverage, you could face crippling financial losses if your home suffers significant damage. It’s a crucial safety net, providing the necessary funds to repair or rebuild your home and helping you avoid a financial disaster.

What Dwelling Coverage Entails

Structural Elements

Dwelling coverage extends to the various structural elements of your home, including walls, roofs, floors, built-in appliances, and the foundation.

Personal Property and Detached Structures

It’s crucial to note, however, that dwelling coverage does not typically include personal property inside the home or detached structures such as garages and sheds. These elements often require additional coverage.

Additional Living Expenses

If damage leaves your home uninhabitable, your policy’s additional living expenses coverage (sometimes called loss of use) can help pay for necessary expenses like hotel stays and meals.

How Much Dwelling Coverage Do You Need?

Estimating Replacement Cost

When choosing the amount of dwelling coverage, a critical factor to consider is the replacement cost of your home, i.e., the cost to rebuild your home from scratch using similar materials and designs.

Considering Local Construction Costs

Local construction costs, including labor and material prices, should influence your dwelling coverage. These costs can vary widely by region and over time, so it’s essential to review and update your coverage regularly.

The Process of Making a Claim

Filing a Claim

Should your home suffer damage, the first step is to contact your insurance company as soon as possible to initiate a claim. Document the damage extensively through photographs and detailed notes, which will be vital during the assessment phase.

The Assessment Phase

The insurer will then send an adjuster to examine the extent of the damage and determine the cost of repairs or replacement. It’s crucial that you are honest and transparent throughout this process to ensure a fair settlement.

The Compensation Phase

Based on the adjuster’s findings, your insurer will then provide compensation, taking into account your policy’s deductible and coverage limits.

Things to Consider When Choosing Dwelling Coverage

Coverage Limits and Deductibles

It’s crucial to select coverage limits that fully cover the cost of rebuilding your home while keeping the deductible – the amount you have to pay out-of-pocket for a claim – at a level you can afford.

Specific Exclusions

Home insurance policies typically exclude certain types of damage, such as those caused by floods or earthquakes. You may need additional coverage or separate policies to protect against these perils.

Additional Coverage Options

Consider whether you need additional coverage for aspects not included in standard dwelling coverage, such as high-value personal property, detached structures, or additional living expenses.


1. What is dwelling coverage in home insurance?

Dwelling coverage, as a part of your home insurance policy, offers financial protection for your home’s physical structure if it gets damaged due to a covered peril.

2. What does dwelling coverage not cover?

Typically, dwelling coverage doesn’t include personal property inside the home, detached structures, or damage caused by specific exclusions such as floods or earthquakes.

3. How much dwelling coverage should I have?

Your dwelling coverage should ideally be enough to cover the complete replacement cost of your home.

4. How can I estimate the replacement cost of my home?

You can estimate your home’s replacement cost by considering current local construction costs, the size and type of your home, and the materials used.

5. How does the claim process work in dwelling coverage?

The claim process usually involves filing the claim, an assessment phase where an adjuster estimates the cost of damage and a compensation phase where the insurer provides the necessary funds, considering your policy’s deductible and coverage limits.


Understanding dwelling coverage is critical for homeowners to protect their most valuable asset. Considering the above mentioned factors, you can select a policy that offers adequate protection, ensuring peace of mind.

Find out what security features to consider before moving into a new home from our blogs at Security Forward.


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