By Jarrod Heil
Home Insurance Breakdown: What Is Coverage A (Dwelling)?
Home insurance may seem like a complicated entity, but it’s actually pretty easy to understand when it’s broken down into separate unique coverages.
Arguably the most pivotal portion of your home insurance policy is dwelling coverage, which is called Coverage A in insurance-speak. This protects the structure of your home and many parts that help create it — like floors, windows and doors — from risks (also known as perils) that are covered by your policy.
If your home’s structure is damaged or destroyed, filing an insurance claim will allow Universal Property & Casualty to inspect the home and what caused the damage. We will then be able to determine the covered loss up to the dwelling limit of your coverage.
Which Parts of My Home Does Dwelling Coverage Protect?
Since dwelling coverage, or Coverage A, protects your home’s structure, it’s only needed by homeowners and not by renters. This pivotal coverage extends to far more than just the wood, bricks or concrete that make up your home’s structure.
The following parts of your home are typically protected by dwelling coverage (up to your policy limits) if Universal finds that a qualifying peril caused the damage or destruction:
- • Frame
- • Roof
- • Foundation
- • Chimney
- • Attached patios, porches and garage
- • In-ground pool
- • Inside fixtures that are permanently installed (like flooring, bathroom apparatuses, countertops and cabinets)
- • Appliances that are built in (like a hot water heater, furnace and sump pump)
Common Types of Policies with Dwelling Coverage
Since dwelling coverage only pertains to homeowners, the coverage applies solely to those who own houses and condos.
An HO-2 policy is oftentimes referred to as a named-peril policy because it protects your home against perils that are specifically named within your home insurance. While it’s recommended to have a more comprehensive policy protecting your home, there are usually 16 covered perils listed within these policies.
An HO-3 policy is commonly referred to as all-risk or open-peril policies because it protects your home in more instances than just the 16 named in HO-2 policies. HO-3s allow more room for claims that wouldn’t otherwise be covered in the lower policy.
How Much Dwelling Coverage Do I Need?
The amount of dwelling coverage that’s necessary depends solely on your home’s market value and how much it would cost to repair, rebuild or replace it if something catastrophic were to occur.
Your neighbor’s coverage amount on the same style home may not be adequate for you or may be too much for you. HO-2 and HO-3 policies are usually replacement cost value policies, which accounts for your home’s entire value without factoring in depreciation.
Cost of labor and construction materials can fluctuate and increase with the cost of living, so you may want to check in with home insurance agent at least once per year to figure out if you still maintain adequate coverage on your home.
Keep in mind that it’s much better to be over-insured than under-insured in the event of a catastrophic event. A good rule of thumb is to research what home builders in your area are charging per square foot, calculate the square footage of your home and the cost of flooring, roofing and carpentry work.
It’s important to check the declarations page of your home insurance policy to figure out exactly what your dwelling limit is and how you’d get reimbursed if a claim needed to be filed.
Our easy-to-use online policy management tool makes finding all these tools seamless. Just login to your account to access all your documents and claims.