Homeowner's insurance is a product people purchase for one purpose — protection of their homes. Protecting a home is something you can only do through homeowner's insurance, and this insurance plan gives protection in several ways. One way is through dwelling coverage. If you are not sure what this is, read on to discover three vital things you should know about it.
What It Is
Dwelling coverage is one of several coverage types you can purchase with a homeowner's insurance policy, and it is the most critical type to have when you own a home. Dwelling coverage protects your home structure, which is why many insurance companies call it structural coverage. This coverage does not protect anything except the structure of your home. You can add other types of coverage to your policy for more protection, but you should always have dwelling coverage if you own a house.
How Much You Need
The second vital thing to know about dwelling coverage is how much you need. Many people experience some confusion when trying to determine an amount of coverage to choose for their plans. There are several ways you can find the answer to this question, and the best way is to find out the replacement costs for your home. If you had to rebuild your house today, how much money would you spend? If you can discover the answer to this question, it will reveal the amount you should have for your dwelling coverage.
Some people base the dwelling coverage on the purchase price of their homes. While you can use this method, the purchase price is not always high enough to replace a house. Therefore, if you experience a total loss, you might not receive enough compensation to rebuild.
The Limitations of Dwelling Coverage
The last essential thing to know is the limitations of dwelling coverage. While dwelling coverage protects your house, it does not protect against all perils. For example, most policies do not offer flood or earthquake coverage. If you lose your house to a flood or earthquake, you might not have any coverage for the damages.
Secondly, your homeowner's insurance does not cover things that break. For example, if you break a window in your home, your policy will not likely pay for the costs to repair or replace it.
If you have questions about dwelling coverage or other types of coverage, talk to a home insurance agent today.