Coverage & Claims
Coverage A (Dwelling Coverage)
The dollar limit a homeowners policy pays to rebuild the structure itself — properly set to rebuild cost, not market value.
Coverage A, or dwelling coverage, is the core limit on a homeowners policy: the maximum amount the insurer will pay to repair or rebuild the physical structure after a covered loss. It's the number every other percentage-based figure on the policy — the wind/hail deductible, often the personal property limit, sometimes the DIC wrap — is calculated off of.
Coverage A should reflect what it actually costs to rebuild the structure at current labor and material prices, not the home's market value. Market value includes land, which never burns down or floods — using it as the Coverage A basis routinely under- or over-insures a property, most often under-insures it, since land value can be a large share of total price in expensive markets.
Why it matters
- Under-insuring Coverage A is the single most common way a homeowner discovers, mid-claim, that a "fully insured" home isn't fully covered.
- Rebuild cost moves with construction-material and labor costs — a limit that was accurate two years ago may already be behind current rebuild pricing.
- Because the wind/hail deductible is usually a percentage of Coverage A, raising the dwelling limit to match true rebuild cost also raises that deductible in dollar terms — a tradeoff worth understanding, not a hidden cost.
How CoverGuard uses this
CoverGuard models Coverage A from a property's modeled rebuild cost (square footage, construction quality, location) rather than defaulting to market value, when the underlying structural data is available.
Related terms
Actual Cash Value (ACV) vs. Replacement Cost Value (RCV)
ACV pays a depreciated claim amount; RCV pays what it actually costs to rebuild — the difference can be tens of thousands of dollars on an older home.
Wind/Hail Deductible
A separate, usually percentage-based deductible for wind and hail claims — often much larger than the flat deductible on the rest of the policy.
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