Dwelling insurance is the portion of your home insurance policy that only covers the cost of rebuilding or repairing your home in the event that it is damaged or lost in a covered peril such as wind, hail, lightening or fire. It doesn’t cover any surrounding property or any personal items contained inside the house. Some companies sell Landlords these policies since it protects them from loss of income due to damages to the house. If you own more than one property, dwelling coverage can be very cost effective.
Separate policies are needed for damages and losses caused by earthquake and flood insurance as these are not covered under standard home insurance policies.
The amount of dwelling coverage that you should purchase should be enough to cover the cost of rebuilding your home in the event of a complete loss. Do not confuse this amount with the market value of your home, as the market value includes the value of your land. Remember that in the event of a disaster, your land will not be lost, only the buildings that stand on it.
To determine the replacement value of your home, check out Home Insurance Calculator, provided by HomeInsurance.com