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THE ROOTS

Dwelling Coverage Amount

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Definition

This is the dollar amount your policy will pay to replace the primary home structure if destroyed. It's the foundation of your homeowners protection.

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About this term

Dwelling coverage should equal or exceed replacement cost to rebuild the home at current prices. Underinsurance leaves homeowners liable for partial losses. Overinsurance wastes premium dollars but provides full protection. Annual reviews ensure coverage keeps pace with construction cost inflation.

Pro Tip

Update dwelling coverage annually as construction costs increase. Inflation erodes coverage adequacy quickly.

Example

A $400,000 dwelling coverage amount covers replacement of the primary home structure if destroyed.

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