Reviewing and adjusting dwelling coverage is one of the most important maintenance tasks a homeowner can perform, yet it is often overlooked. Insurance policies are not set-and-forget documents. As homes age, change, and exist in shifting economic conditions, coverage must evolve accordingly.
The first step in reviewing dwelling coverage is understanding the current Coverage A limit and how it was calculated. Homeowners should confirm that the limit reflects the cost to rebuild the home, not its market value. This means excluding land value and focusing on construction costs, labor, and materials.
Next, homeowners should evaluate changes to the home since the policy was issued. Renovations, additions, finished spaces, upgraded kitchens or bathrooms, and structural improvements all increase rebuilding costs. Even improvements made several years ago can create underinsurance if limits were never updated.
Construction cost inflation should be considered during every review. Rebuilding costs can rise quickly, especially after regional disasters or during labor shortages. Policies without inflation protection may gradually lose adequacy over time.
Homeowners should also review policy endorsements related to dwelling coverage. Ordinance or law coverage, extended replacement cost, and inflation guard endorsements can significantly affect claim outcomes. Limits and percentages for these endorsements should be reviewed for adequacy.
Deductibles should be reviewed alongside dwelling limits. A deductible that once felt manageable may no longer be appropriate as coverage limits increase. Homeowners should confirm they can realistically afford the deductible amount in a worst-case scenario.
Another key review area is excluded risks. Homeowners should assess whether their location or property characteristics expose them to risks not covered by standard dwelling coverage, such as flood or earthquake damage. If so, separate policies should be considered.
Reviewing dwelling coverage also involves understanding how it affects other parts of the policy. Other structures coverage, loss of use coverage, and sometimes liability limits are often calculated as percentages of the dwelling limit. Adjusting dwelling coverage can improve overall policy protection.
Dwelling coverage should be reviewed annually and after any major life or property changes. A structured review helps ensure coverage remains aligned with the true cost of rebuilding and reduces the risk of surprises after a loss.
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