Home Owner Policies
Knowing the right amount of dwelling coverage, you need can be a tricky situation. Dwelling coverage or coverage A as it is also listed represents the dollar amount you will receive from the insurance company for the structure if your home is damaged or destroyed by a covered loss.
Understanding What is Covered Under Your Dwelling Limit
The Insurance Information Institute states that most standard homeowner insurance policies cover specific hazards or perils. Coverage will vary from company to company and state to state, but most homeowners’ policies cover the following:
- Fire and smoke
- Windstorms and hail
- Lightning strikes
- Vandalism and malicious mischief
- Damage from an aircraft, car or vehicle
- Falling objects
- Weight of ice, snow or sleet
- Water damage
It’s always a good idea to discuss the coverages on your insurance policy with a licensed agent and be sure that you are clear on what is covered and what is not. For example, many homeowners’ policies will not cover flood or earthquakes.
So, what is Dwelling Coverage?
Dwelling covers the physical structure plus it may include other attached structures as well. For example, an attached garage may be covered under your coverage a limit. The limit you choose for your dwelling coverage is vital for many reasons, one you want to make sure you have enough to repair or replace your home. But the limit you choose for coverage A determines other limits as well, such as personal property coverage. This limit is factored as a percentage of your total dwelling coverage. The question then becomes “How much coverage a do I need?”
How to Set Your Coverage A Limit
When factoring the right amount for your dwelling coverage, insurance companies want to know the cost to rebuild your home in today’s construction market plus the cost of material to make you whole again. It’s important not to confuse this number with the market value of your home which accounts for the land that your house is built on. Of course, if you have a mortgage on your home, the lender will require at least that amount on your insurance. But it’s important to know if that amount is less than what the replacement cost of your home is, you will need to insure it for what the replacement cost is. Most agents can help you determine the proper amount of coverage A through a home value calculator or similar tool.
Don’t Gamble on Your Insurance
Choosing the right limits for your homeowner’s insurance is essential and may be a confusing process, but our agents are here to help. To learn more about dwelling coverage, contact the experts at compareaquote.com or 1-888-255-8688. Our licensed insurance experts will be happy to answer any questions you may have.