Dwelling coverage is typically calculated using an up to date replacement cost estimator that takes your home’s features and specifications (year built, square footage, roof type and age, number of bathrooms, upgrades done to the home, etc) as well as your specific location (for building and material costs as well as other factors) and comes up with the amount for which your home should be insured. Sometimes it is also calculated manually, but more often your agent will have access to what is known as a “costimator” that will aid them in figuring out how much coverage you need on your home. It is an important process as you should always be covered for 100% replacement cost to make sure you are fully covered in the event of a catastrophic loss.
The dwelling coverage also determines the amounts for several of the other coverages on your home policy such as Other Structures, Personal Property and Loss of Use as they are percentages of the Dwelling coverage. If you have any questions about your coverages, you should consult your agent directly. For a very rough estimate on how dwelling coverage is estimated, use our homeowners insurance calculator.