Dwelling Insurance

What Does Dwelling Insurance Mean?

Dwelling insurance is a policy that provides coverage for the physical structure of a home and any attached structures, such as sheds, garages, and patios. Under this coverage, the insurance company will pay for the costs associated with rebuilding or repairing the damaged structure if the damage is caused by a covered peril.

Insuranceopedia Explains Dwelling Insurance

Dwelling insurance offers various forms of coverage, categorized as follows:

• Coverage A: This covers buildings used exclusively for residential purposes, containing no more than four apartments. It includes townhouse or row house structures and applies to dwellings that are still under construction.
• Coverage B: Similar to Coverage A, this coverage applies to dwellings that must not be used for business purposes, except when permitted as incidental occupancy or when rented as a private garage.
• Coverage C: This covers rental apartments, including the equipment, furnishings, and appliances within rooms or common areas. It also applies to condominium units used by the insured or rented to others.
• Coverage D: This provides protection against the loss of fair rental value for properties falling under Coverages A, B, and C.
• Coverage E: This offers additional living expenses and applies only to dwellings occupied exclusively by the owner.

These coverage forms are typically sold as part of a dwelling fire policy, such as the DP-3 policy, which covers the structure on an open-perils basis. Dwelling policies are often used for rental properties, vacant homes, or buildings that don’t qualify for a standard homeowners policy. For owner-occupied homes, dwelling coverage is usually included as part of a broader homeowners policy, which also protects personal property and provides liability protection. You can read more about what homeowners insurance covers to see how dwelling protection fits into a full policy.