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  • Writer's pictureScott Brekne

What is Dwelling Coverage and How is it Determined?

Updated: Apr 7, 2023

Often referred to as "Coverage A", dwelling coverage is the section of your homeowners insurance policy that covers the physical structure of your home along with its permanent attachments and fixtures. It also covers materials and supplies located on or next to your home structure that are used to construct, alter or repair it. Land, including the land on which the dwelling is located, is not covered.

Three different levels of dwelling coverage exist for a home:

- actual cash value: includes deductions for depreciation

- replacement cost: excludes deductions for depreciation

- guaranteed replacement cost: covers the full cost to repair or rebuild the home, even if it exceeds the policy limit

In order to determine the amount of dwelling coverage a home needs, a licensed insurance agent should run a "replacement cost estimator". The main purpose of this estimator is to use various home features and characteristics to come up with an estimated amount that it would cost to rebuild your home. Some of the inputs entered into a replacement cost estimator include the home's:

- square footage

- age

- style (i.e., cape, colonial, ranch, split-level)

- shape (i.e., square, rectangle, L-shaped, custom)

- foundation (i.e., unfinished basement, finished basement, crawl space, slab)

- roof (i.e., flat, gable, hip)

- interior and exterior features (i.e., builder's grade, semi-custom, custom, luxury)

Many insurance carriers offer extensions to your dwelling coverage amount for an additional premium, including specific percentage increases as well as guaranteed replacement cost coverage.

If at any time you feel that the dwelling coverage amount given for your home is higher or lower than it should be, reach out to your agent to review it. You know your home best and it may be possible to make changes.

Have questions? Contact Brooks Robb & Callahan for any of your insurance needs.

About Brooks Robb & Callahan

Brooks Robb & Callahan is a family owned and operated independent insurance agency protecting personal and commercial clients from property and casualty risks since 1871. Sisters Kristen Ducharme and Lindsey Stortz acquired the business from their long time family friends in July 2013. Their brother, Scott Brekne, joined the business in 2021. Together they continue to run the business the way it always has been – by family with honesty and integrity. They feel incredibly blessed to have the opportunity to work together every day.

The information provided in this blog is for educational purposes only and is not a substitute for professional advice. Insurance coverages and policies can vary significantly based on individual circumstances and the terms of the policy. Brooks Robb & Callahan recommends consulting a licensed insurance professional or your insurance carrier to determine the appropriate coverage for your specific personal needs.

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