What is Dwelling Insurance? (August 2025)

Dwelling coverage is the portion of your home insurance policy that covers the physical structure of your home against damages from fire, hurricanes or getting crushed by a fallen tree. It is also known as Coverage A.

How does dwelling coverage work?

Having dwelling insurance cover the amount needed to rebuild your house, making it one of the most vital and expensive components of your insurance coverage.

Making a claim is the first step towards receiving a payout from your dwelling coverage. While some insurers require you to register claims by phone, others allow you to do so online or using an app. You may need to submit proof of the damage, such as photos or a video. An adjuster from the company may also visit the house in person.

The amount of dwelling coverage you require depends on your home's replacement cost. For instance, if you have a $200,000 dwelling coverage limit. Then it will be the total amount your insurer would pay to rebuild your home and any related structures.

Structures not related to your home, like a fence or shed, get covered by the 'other structures coverage' section of your homeowners insurance policy.

What is covered by dwelling insurance?

An HO-3 policy is the most common type of home insurance policy available. HO-3 policies are all-risk policies. So, your home's structure will get protected from all risks except those specifically excluded from your policy. So, the following are the types of damage that dwelling insurance will normally cover.

• Smoke
• Accidental discharge or overflow of water
• Damage caused by aircraft (not your own)
• Lightning or fire
• Damage caused by vehicles (not your own)
• Falling objects
• Explosion
• Hail and windstorm
• Freezing
• Power surges
• Vandalism and malicious mischief
• Uprising or civil commotion
• Sudden tearing or cracking of household appliances
• Burglary
• Volcanic eruption
• Weight of ice, snow, or sleet

What is not covered by dwelling insurance?

Though the coverage protects your home against many perils, there are some damages that the coverage won't offer protection.

• Earthquakes: They can lead to substantial structural damage. Even in earthquake-prone areas, earthquake insurance is not necessary. However, it will cover damage caused by a quake that home insurance will not.
• Flooding: It can harm your property and the structure where you live, but dwelling insurance does not cover the damage. A separate flood insurance policy will cover this. Where you reside decides whether you should buy the insurance or not. You can buy flood insurance from NFIP or a private insurer.
• Maintenance damage: Dwellings can damage due to poor maintenance, including failing to fix a leaky roof or ignoring pest infestations.
• Service line coverage: You get covered from losses from the different service lines that enter your property, thanks to service line coverage. Water, gas, sewer lines, internet cables, and electrical wires are frequently covered service lines. However, each property insurance has a different list. Be mindful that not all insurers offer this coverage. Consult an insurance expert to know more about your alternatives for service line coverage.
• Sewer backup/Sump pump coverage: A specific endorsement for homeowners insurance is sewer and drain line backup coverage, also known as water backup coverage. It covers your home and belongings if a drain line backup causes damage. Backup damage frequently happens during heavy rain when a sump pump cannot handle the increase in water pressure and overflows, letting water into a basement or crawlspace. Sewer lines, however, can back up anywhere in a house, including in the floor drains, sinks, and toilets. A home insurance policy must include a water backup endorsement to cover this damage.

Insurance for structures not covered by dwelling coverage

Your policy won't cover a building on your property that isn't connected to your house, as it doesn't qualify as a part of your house. It may be a detached garage, shed, or fence. So, how will your get coverage for it? The other structures coverage in your policy could help cover the damage to these detached buildings on your property.

Dwelling coverage limits and deductibles

A dwelling coverage has limits and deductibles. The maximum amount your home insurance policy will contribute to a covered loss is the limit. The deductible is the amount you are responsible for paying out of pocket for a covered loss.

Your dwelling coverage limit is something you decide when purchasing homeowners insurance. The cost of rebuilding your house should decide the limit (not essentially the home's market value). Most home insurance policies include replacement cost coverage for your home's physical structure. Your dwelling coverage limit may impact other coverage limits in your home insurance policy.

The percentage of your dwelling coverage limit that applies to your other structures coverage limit is usually 10%. Therefore, your other structures coverage limit would be $20,000 if your dwelling coverage limit is $200,000.

How much dwelling coverage do I need?

Are you buying a home insurance policy? Confused about how much dwelling coverage you require? Then follow these steps to determine how much dwelling coverage you require.

• Difference between market value and replacement value: It will help you determine how much you should insure your house for. The price of homes will differ depending on factors like the home's location or the housing market's strength. You must know about your home's replacement cost or how much it will cost to rebuild after a total loss.
• Consider the size of your home: Larger homes will probably require more coverage as they are more expensive to reconstruct than smaller homes. Similarly, houses with finished basements probably require more dwelling coverage to consider the additional room.
• Think about the features: Each home has some unique features. For instance, builder-grade homes will probably require less dwelling coverage than upgraded or luxurious homes.
• Consider the age of your home: Due to non-standard lumber sizes or out-of-date construction methods, older homes may cost more to rebuild or repair.

How to calculate dwelling coverage

Not sure how much your dwelling coverage should be? You can quickly calculate it. You can get it by multiplying the square footage of your home by the typical cost per square foot to build in your area.

How much does dwelling coverage cost?

Dwelling coverage is the most costly coverage in your homeowners insurance policy. Ideally, your home insurance premiums will surge the more dwelling coverage you have. The following are the average annual home insurance rates based on various dwelling coverage limits.

How do claims work with dwelling coverage?

Suppose a covered event leads to structural damage to your house. In that case, you can file a dwelling coverage claim with your insurer for reimbursement. Here's what you must do!

You can usually call or submit an online claim to your insurer. Your insurer will normally send a claims adjuster to your home to analyze the damage and determine a payout after you provide documents proving the damage. The amount you receive as a claims payout will depend on your home insurance deductible, the cost you are liable for paying before the policy kicks in to cover the rest.

Types of dwelling coverage

There are various types of dwelling coverages available. Which one you need depends on the type of home you own.

Homeowners insurance dwelling coverage

Home insurance policies like HO-1, HO-2, HO-3, HO-5, and HO-8 offer dwelling coverage. It implies that you will get dwelling coverage if you purchase a home insurance policy. Some insurers may refer to your home insurance policy as 'hazard insurance.' It isn't a separate policy. It refers to the coverage for certain hazards you get when purchasing your policy. Dwelling coverage, other structure coverage, and personal property coverage come under hazard insurance.

Condo insurance dwelling coverage

Condo owners get protection under HO-6 policies. Your HO-6 coverage should cover the interior of your home, your personal belongings, and your liability needs. The master policy of your association should cover the majority of the structure. Each condo association, however, has its master policy, which will determine how much dwelling coverage you need to purchase on your condo policy.

Rental property insurance dwelling coverage

If you have a rental property, you should think about rental property insurance and understand how it works. The policy, also known as a DP-3 policy type, contains dwelling coverage to protect the structure of your rental property in the case of a covered loss. Also, it has many coverage alternatives not found in a regular HO-3. Since landlords face different risks than homeowners, rental property insurance covers this with coverage alternatives such as wrongful eviction and loss of use.

Dwelling policies: Definitions and details

At times, a property doesn't require a full home insurance coverage policy. A hunting cabin, for instance, may require different coverage than your primary residence. Similarly, a coastal vacation home or a rental property may require special insurance. In these cases, a dwelling policy may be the best solution, especially if the owner does not live on the covered property. A dwelling policy provides practically flexible coverage.

Dwelling insurance lets you pick and choose which coverages to apply to your home. A dwelling policy solely covers the dwelling, with additional coverages available as optional add-ons. Liability coverage, for instance, is not standard but can be added extra.

Dwelling policy vs. Homeowners policy

A standard home insurance policy and dwelling coverage are completely different. Dwelling policy frequently covers a home or other unoccupied structure by its owner. Unlike home insurance policies, dwelling policies don't offer as much protection for you or your property. Dwelling policies are for those with properties other than those they live in. So, a dwelling policy will be the best choice for a landlord who owns a rental home. A dwelling policy differs from the 'dwelling coverage' included with a homeowners insurance policy. In a homeowners policy, the term 'dwelling' refers to the actual home or main building where the owner resides.

What kinds of buildings are eligible for a dwelling policy?

These are the buildings that a dwelling policy ideally covers.

• Old homes
• Vacation houses
• Rental properties
• Older homes
• Some mobile homes that are permanently located
• Homes currently under construction

Dwelling policy coverages

A dwelling policy offers many coverage options. Although coverage levels vary according to insurance level, you must add these coverages to the basic coverage.

• Coverage A (Dwelling): Offers coverage for the primary residence and any attached garages or carports.
• Coverage B (Other structures): Offers coverage for the property's detached structures.
• Coverage C (Personal property): Personal possessions get coverage under this. The tenant's property isn't covered if it is a rental one.
• Coverage D (Fair rental value): If a rental property is considered unfit for regular use, this coverage ensures compensation for the owner.
• Coverage E (Additional living expenses): If a covered loss makes your home uninhabitable, it pays for living costs. Although you can add this coverage as an endorsement, this coverage is not a requirement on the basic form (DP-1).
• Coverage L (Personal liability): It is similar to the liability coverage included with home insurance policies. It covers losses brought on by property damage or bodily injury.
• Coverage M (Medical payments): It pays for the medical costs of anyone hurt at the insured property, hurt by the insured, or hurt by an insured's pet.

What are the different types of dwelling policies?

Dwelling policies offer varying levels of coverage, similar to home insurance policies - DP-1 (basic), DP-2 (broad), and DP-3 (special). DP-3 offers the most coverage among the three.

DP-1 coverage

DP-1 coverage protects your house and personal belongings from specified risks. It provides coverage for the home, other buildings, and personal property at actual cash value, which considers depreciation when calculating your claim settlement. As a result, the payout will be lower than what you spent for the items initially.

A DP-1 coverage is a named peril policy. Fire, lightning, and internal explosions get covered under this. You can also get these covered at an extra cost.

• Hail
• Wind
• Civil unrest
• Smoke
• Riot
• Aircraft
• Explosion
• Vehicle
• Volcano

DP-2 coverage

Even though it is stronger than a DP-1, a DP-2 is also a basic coverage. It covers the house and other structures at replacement cost, compensating you for replacing an item at market value. Amounts covered for the personal property remain at actual cash value.

The coverage offers protection for the following.

• Collapse
• Tearing asunder
• Damage from snow and ice
• Glass breakage
• Burglary damage
• Falling objects
• Accidental water discharge
• Frozen objects
• Electrical current

DP-3 coverage

It offers the maximum coverage. It is an open peril policy for the insured residence and other structures. Except for those specifically stated in the policy, they shall get protection from all risks. Personal items get covered on a named peril basis against the same risks listed in the DP-2 coverage. The residence and other structures are insured at replacement cost under DP-3, while personal belongings get insured under actual cash value.

Endorsements to a dwelling policy

One of the attractive aspects of dwelling policies is the ability to select and choose the type of coverage you require. Also, you can add the following endorsements to your coverage.

• House under construction: If your house is under construction, you can protect it with this endorsement. The policy limits will increase as construction advances.
• Mobile home: You can add coverage for your mobile home with a dwelling policy. But you must ensure that the home is located on a safe foundation.
• Automatic hike in insurance: With this endorsement, you can protect yourself against inflation by raising the amount of insurance coverage in annual increments.
• Theft coverage: It doesn't come as standard in any home insurance policy. There are two types of endorsements available - broad theft coverage for dwellings occupied by the owner and limited theft coverage for dwellings unoccupied by the owner. Personal property coverage will have limits. The following are a few basic limits.

What does a dwelling policy not cover?

The amount of coverage you choose determines the scope of your dwelling policy. For instance, if you buy DP-1 coverage, your home and personal belongings will be vulnerable to several uninsured risks. Although DP-2 and DP-3 coverage offers more protection, you must add critical coverages such as liability and medical payments as endorsements to these policies. However, the policy doesn't cover certain risks.

• War
• Flood
• Nuclear disasters
• Earthquake
• Government acts
• Intentional loss

Dwelling policy: What to consider

A dwelling policy can be an excellent choice for coverage on a property other than your primary dwelling. A dwelling policy with additional liability coverage may be suitable if you own a rental property. There are various circumstances in which dwelling policies can be a boon.

For instance, homeowners policies will be more difficult to obtain if a homeowner has a low credit score or a long history of claims. Similarly, getting a dwelling policy may be easier if the house is in poor condition. If you can get homeowners policy, it can provide you with more coverage and more peace of mind.

Summary

Standard homeowners insurance policies include dwelling coverage. It protects the structure of your home from natural disasters. Always ensure that you have a policy that calculates your payment based on the replacement cost of your home. With optional coverages, you can strengthen your home's coverage.

How to file a home insurance claim for dwelling coverage with Way.com

Most home insurance policies have dwelling coverage. But do you have a home insurance policy? If not, how can you buy an affordable home insurance policy? That's where Way.com can help you!

You should use our website or app to get quotes from all insurers in your area. Then you must compare the quotes and buy a policy with the most affordable rate. Do you need assistance filing a claim? You can easily do this using our website. Or our home insurance agents in your area can help you. They will help you understand the most complex home insurance terms, rules, discounts, and coverages. Also, they will guide you in filing a claim quickly!