Dwelling Coverage
Dwelling coverage (Coverage A) is the core of your homeowners insurance — it pays to repair or rebuild the physical structure of your home if it’s damaged by a covered event like fire, wind, hail, or lightning.
This covers the house itself: walls, roof, foundation, built-in appliances, HVAC systems, plumbing, electrical, and attached structures like a garage or deck. It does NOT cover detached structures (that’s Coverage B), your personal belongings (Coverage C), or landscaping. It’s the single largest coverage amount on your policy.
Getting the Amount Right
Your dwelling coverage should equal the replacement cost of rebuilding your home from scratch — not the market value, not the purchase price. Replacement cost is purely construction: labor + materials at today’s prices. A home worth $400,000 on the market might cost $350,000 to rebuild (because land value isn’t included), or it might cost $450,000 to rebuild (because custom features cost more to replicate).
Average construction costs range from $150-$300+ per square foot. A 2,500 sq ft home needs $375,000-$750,000 in dwelling coverage depending on your area and home quality. Your insurer can run a replacement cost estimate — get one every 2-3 years as construction costs rise.
Watch out: Underinsuring your dwelling is incredibly common and incredibly costly. If your home costs $400,000 to rebuild but you only carry $300,000 in dwelling coverage, you’ll eat the $100,000 gap yourself. Worse, many policies have a coinsurance clause — if you’re insured at less than 80% of replacement cost, the insurer can reduce your payout proportionally. A $50,000 claim might only pay $37,500. Keep your dwelling coverage at 100% of replacement cost.
Consider adding extended replacement cost coverage, which pays 25-50% above your dwelling limit if rebuilding costs exceed the policy amount. After a natural disaster when contractors are in high demand, construction costs can spike 20-40%. Extended replacement cost coverage typically adds $30-$60/year to your premium and protects against these post-disaster price surges.
Factor dwelling coverage into your total home buying budget. Higher-value homes cost more to insure — and homes in wildfire, hurricane, or tornado zones face surcharges. Use the property tax calculator to see how insurance fits into your monthly payment. Review your policy limits after any renovation that adds square footage or upgrades materials.
Does dwelling coverage include my garage and patio?
Attached structures (attached garage, covered patio, built-in deck) are included under dwelling coverage. Detached structures — a separate garage, shed, fence, or pool house — fall under Coverage B (Other Structures), which is typically set at 10% of your dwelling coverage. If you have expensive detached structures, you may need to increase Coverage B separately.