Dwelling coverage provides protection for the structures of homes if they are damaged or destroyed under certain conditions. Your Plano, Texas, home should carry dwelling coverage that is based its value. As you select coverage for your home, also keep in mind that the limits for some of the other types of coverage on your homeowner’s insurance policy will be based on the dwelling coverage amount. For example, your loss of use coverage and personal property coverage are limited to a percentage of your dwelling coverage.
Determining Dwelling Coverage Amounts and Policy Endorsements
The dwelling coverage for your home is limited to the structure of the building. This means that when you calculate your home value to determine your coverage needs, you should consider only what the house itself is worth and not your house plus the property it stands on.
The correct amount of coverage will depend on the actual cash value of your home or on the amount it would cost to replace your home. When qualifying damages occur, you may not receive the full cost of replacement unless you have a replacement cost endorsement on your policy. Gaps between coverage limits and rebuilding costs can occur because the actual cash value of established homes on the market may be less than the construction cost of building new homes. In other words, the cash value associated with your home is based on what you could sell your home for today, rather than what you could build it for at today’s construction rates. Dwelling coverage based on the cash value of your home has a lower limit than a replacement cost endorsement on your policy has. Consult with our independent agent to discover the dwelling coverage available in Plano, Texas, and determine which coverage amounts and endorsements suit your needs as a homeowner.