How Much Dwelling Coverage Is Enough for Your Home?

​Unsure how much dwelling coverage you need?

​Learn how to calculate the right amount of home insurance to fully rebuild your home in case of a total loss.

---

🏡 Your Home’s Rebuild Cost Isn’t the Same as Its Market Value
When it comes to home insurance, one of the most important decisions you'll make is selecting the right dwelling coverage limit—the amount your policy will pay to rebuild your home after a covered loss like a fire, tornado, or severe storm.

Too little coverage, and you may be left paying thousands out of pocket. Too much, and you might be overpaying for protection you don’t need.

So how much dwelling coverage is enough? Let’s break it down.

🔍 What Is Dwelling Coverage?
Dwelling coverage (Coverage A on your home policy) protects the structure of your home, including:

• Walls, roof, and floors
• Foundation
• Plumbing and electrical systems
• Built-in appliances and fixtures

It’s what your insurance uses to rebuild your home from the ground up if it’s damaged or destroyed by a covered peril (e.g., fire, tornado, hail, lightning).

🧮 How to Calculate the Right Amount
Your dwelling limit should reflect the cost to rebuild your home, not the market value or your mortgage balance.

Key Factors in Replacement Cost:

• Square footage
• Local construction labor and material costs
• Roof type and age
• Foundation type
• Custom features (e.g., granite counters, crown molding)

Average rebuild cost in 2024 ranges from $150 to $300+ per square foot, depending on location and finish quality.
Example: A 2,000 sq. ft. home in Kansas may require:

• $200/sq. ft. x 2,000 sq. ft. = $400,000 in dwelling coverage

🛠️ Beware of Underinsuring Your Home
Choosing too low a dwelling limit could leave you responsible for:

• Partial rebuild costs
• Code upgrades (if not included)
• Shortfalls due to inflation

Most policies include replacement cost coverage, but you must insure to at least 80–100% of the rebuild value to avoid coinsurance penalties (where you're responsible for part of the loss).

🔧 Extended & Guaranteed Replacement Cost Options
Extended Replacement Cost:

• Adds 10–50% to your Coverage A limit if construction prices spike after a disaster
• Available through carriers like Safeco and Allstate

🧾 How Do Insurance Carriers Determine Rebuild Costs?
Insurance agents use replacement cost estimators—software tools that analyze:

• Home specs (sq. footage, materials, features)
• Local building codes
• Zip code construction trends

Carriers like Progressive (via Homesite) and Safeco automatically generate recommended limits, but you should always review them for accuracy.

📋 Additional Structures and Coverage B
Dwelling coverage only applies to the primary home. If you have:

• Detached garages
• Sheds or barns
• Pool houses or workshops

…you’ll need Coverage B (Other Structures), which typically starts at 10% of the dwelling limit.
If you have extensive structures, this may need to be increased manually.

✅ Final Thoughts
Your home is likely your biggest investment—make sure you’re fully covered. At Corin Insurance, we help homeowners in Texas, Kansas, and Missouri find policies that reflect true rebuilding costs, not guesswork.

Want a free coverage review? Contact our team today to make sure your limits are keeping up with construction costs and inflation.

Disclaimer:
This article is for general informational purposes only. Dwelling coverage needs vary based on location, home features, and market conditions. Always consult with a licensed insurance agent to review your policy and ensure adequate protection.