Over the years, dwelling insurance has become a very important aspect when making insurance decisions as a homeowner. This is because this insurance helps to protect the physical structure of your home and the contents within it from certain damages that are caused by hazards.
As the need to have somewhere you can rest your head increases, so does the need to have it insured. So whether you are a homeowner or planning on becoming one, there is a very high chance that you will need to purchase dwelling insurance so as to have your home protected.
In this well-detailed comprehension, we will be providing you with every necessary information about this insurance coverage. So go grab some popcorn and a bottle of Coke while we walk you through this informative piece.
Without much ado, let’s dive right in.
What is Dwelling Insurance?
Dwelling insurance is a type of insurance that safeguards your home and some of its belongings from covered damages or losses.
This insurance provides coverage for the physical structure of your house; that is, it protects everything that is part of your building structure. These include the foundation, walls, roof, and other building components.
Dwelling insurance is designed to help you rebuild or even repair your home in the event of a covered loss.
However, there are certain factors that affect the cost of this insurance, and it is important that we check them out.
Factors that Affect the Cost of Dwelling Insurance
The following are the factors that affect the cost of dwelling insurance:
Overview of the Factors that Affect the Cost of Dwelling Insurance
An important factor that you have to take into consideration while purchasing this insurance is the location.
The location of your home matters a lot in the sense that some areas are more prone to certain disasters than others.
For instance, there are certain areas that are more likely to experience natural disasters such as tornadoes, hurricanes, earthquakes, etc. So this really determines the cost of this insurance.
Home Size and Value
Another factor that affects the cost of dwelling insurance is the size of the home and its value. Better put, the larger your home and the more valuable it is, the more expensive it will be to insure.
Bigger homes will require more money to maintain compared to those that are smaller.
Dwelling insurance providers also take the age of your home into consideration when determining its insurance costs.
Older homes may be more expensive to insure, as they are more likely to have outdated or unsafe features.
Before an insurance company starts paying off your covered plans, there is a certain amount you will be required to pay first. And this is known as deductible.
So the higher your deductible is, the lower your insurance premiums will be. However, it’s important to make sure you can afford to pay your deductible in the event of a claim.
For example, if you have a high deductible of $7,000, you’ll need to have that amount of money set aside in case of an emergency.
Different insurance companies have different rates, so it’s important to shop around and compare quotes from multiple companies.
The Past Claims History
Your past claims history can have a big impact on your dwelling insurance costs. If you’ve had a lot of claims in the past, your premiums will likely be higher. This is because you’re considered to be a higher risk to insure.
On the other hand, if you’ve never had a claim, you may be eligible for a claims-free discount.
Cost of Dwelling Insurance
The exact cost of dwelling insurance might not be determined due to some factors that we’ve discussed above. However, the average cost of this insurance ranges from $57 to $242 per month.
At this juncture, let’s dive into the things that are covered by this insurance.
What Dwelling Insurance Covers
The following is a list of things that are covered by dwelling insurance:
- Structural Damage
- Built-in Appliances
- Attached Structures
- Liability Protection
- Additional Living Expenses.
The main structure of your home is protected by dwelling insurance from structural damage. This insurance covers the walls, roofs, floors, and foundations.
This insurance has you protected whether you are doing a full structure replacement or even repairing a cracked wall.
This policy also covers the built-in appliances in your home. These appliances include the central air conditioning system, furnace, etc.
These items are very important for the effective functioning of the home, and they can be very expensive to repair or maintain without insurance.
Your garage and decks are good examples of attached structures. Hence, dwelling insurance can extend to the coverage of these components.
There are some expenses that you can extend this insurance to. They may not relate to the structure of the home directly, but they are often included in the liability protection.
Some examples of these are the legal and medical expenses in case someone is injured on your property and decides to sue you for it.
Additional Living Expenses
In the unfortunate event that your home becomes unlivable due to a covered loss, dwelling insurance can help cover the additional costs associated with temporary living arrangements, such as hotel stays and meals.
Now that we have gotten this far, you might be wondering or trying to understand why you need this insurance. So let’s just understand why dwelling insurance is important and necessary for you to have as a homeowner.
Why Do You Need Dwelling Insurance?
Below is a list of some reasons why you need dwelling insurance:
Protecting Your Investment
Arguably, your home is your most significant investment. The least you can do for it is to protect it from some unexpected events that likely arise in the future. In that sense, that is where dwelling insurance comes in.
Peace of Mind
This is one of the greatest feelings one could have. And what feeling is that? Well, we’re talking about your peace of mind.
The idea of knowing that you have your home covered and protected from unexpected disasters like fires, storms, or theft provides invaluable peace of mind.
This is mainly because you won’t have to worry about shouldering the entire financial burden if a disaster occurs.
There are some legal and medical expenses that can ruin your life. This insurance tends to protect you from such situations.
FAQ on Dwelling Insurance and What it Covers
Does dwelling insurance cover flood damage?
It doesn't. Dwelling insurance does not typically cover flood damage. Flooding is considered a separate risk from other types of water damage, so you would need to purchase a separate flood insurance policy to be covered for flood damage.
Does dwelling insurance cover damage from sewer backups
This is another case where it depends on the cause of the damage. Generally, if the damage is caused by a covered peril, such as a burst sewer line, it may be covered. But if the damage is caused by something like tree roots growing into the sewer line, it may not be covered.
Do I need separate insurance for my home office?
That's an important question, and the answer is that it depends on the type of business you're running. If your home business involves customers or clients coming to your home, or if it involves a lot of equipment or inventory, you may need a separate policy. However, if your home business is small and doesn't involve much in the way of visitors or inventory, you may be able to add it as an endorsement to your dwelling insurance policy.
What if I'm renting out part of my home?
The answer is that you may need a separate policy in this case. This is because you have two different sets of risks: one for your own home, and one for the rental unit. So it's best to talk to your insurance agent to find out what type of coverage you need.
In conclusion, dwelling insurance is an important component of homeownership. It offers protection for your home’s structure and provides financial security in times of need.
By understanding what dwelling insurance covers and why you need it, you can make informed decisions to safeguard your home and properties.
Don’t wait until disaster strikes; now is the time to invest in dwelling insurance for a secure and worry-free future.