Dwelling coverage
Updated for plan year 2026
In plain terms
Dwelling coverage (Coverage A) is the amount a home policy will pay to rebuild your house's structure after a covered total loss. It should be based on local rebuild cost per square foot, not your purchase price or market value, and it is the figure the other coverages (other structures, contents, loss of use) are set as percentages of.
A plain example
Your home would cost $400,000 to rebuild from scratch, even though it's worth $520,000 on the market because of the land. Your dwelling coverage should be about $400,000: the rebuild cost, not the sale price.
Why it matters
Insuring to market value is the most common home-insurance mistake, and it usually leaves owners underinsured because rebuild cost can exceed the price of the house. Get this number right and every other limit follows.
A common point of confusion
Market value includes your land, which never burns down; rebuild cost is only materials and labor. In many markets rebuild cost is actually higher than market value.