What Is Coverage A? Dwelling Coverage and Why Does It Matter?

If you only understand one number in your homeowners insurance policy, it should be your Coverage A your dwelling coverage. Everything else flows from this number. And in Florida, getting it wrong is one of the most expensive mistakes a homeowner can make.

Coverage A is the portion of your policy that covers the physical structure of your home walls, roof, floors, and built-in fixtures. It pays to repair or rebuild your home after a covered event.

The Most Common Misconception

Dwelling coverage is based on what it would cost to REBUILD your home not what you paid for it, and not what it’s worth on the market. In Florida’s current environment, rebuilding costs are significantly higher than they were just a few years ago. A home that sold for $380,000 might cost $450,000 or more to rebuild. If your Coverage A is set at your purchase price, you are underinsured. That gap comes out of your pocket.

Why Florida Is Different

Florida has strict building code requirements that affect rebuild costs. Post-Hurricane Andrew, Florida adopted some of the toughest residential building codes in the country. If your home was built before those updates, a major rebuild would require bringing the structure up to current code — which adds significant cost. This is why proper dwelling coverage calculation matters more in Florida than almost anywhere else.

What Happens If You’re Underinsured?

If your dwelling coverage is set too low and you have a total loss, your insurer pays up to your Coverage A limit and you are responsible for the rest. On a $450,000 rebuild with $350,000 in coverage, you’re writing a $100,000 check out of pocket. This happens to Florida homeowners after every major storm. And it happens because nobody sat down with them to make sure the number was right.

The Annual Review

Building costs change. Material prices fluctuate. Your home may have been improved. Reviewing your Coverage A every year at renewal is essential — not optional. I make it standard practice with every client I serve at Las Margaritas Insurance.

📞  Call Las Margaritas Insurance: 786-539-2739

“Because at Las Margaritas Insurance, it’s clarity over coverage.”

Caridad Pacheco | Las Margaritas Insurance | Serving All of Florida