Extended Dwelling Coverage

Homeowner’s insurance is a key element to owning a home. Not only is it required to get a mortgage, but it offers valuable protection and security to your finances in the event your home is robbed or damaged from fire, weather, an accident, etc. If you own a home or want to own a home, you should make sure you have a homeowner’s insurance policy that fits your particular needs.  

What is Extended Dwelling Coverage?  

Not all homeowner’s insurance policies are the same in that they don’t always cover every single situation that might arise. You should speak with an insurance advisor to ensure that you have coverage for all the types of circumstances you want coverage for. Sometimes additional coverages, such as Extended Dwelling Coverage, are helpful if you want to have more comprehensive protection. 

Meaning of Extended Dwelling Coverage 

A standard homeowner’s insurance policy will have something called “Coverage A” or “Dwelling Coverage”, which provides you financial coverage in case your dwelling receives damages or destruction. However, your Dwelling Coverage will have a limit, and it won’t necessarily take into account the total cost of home replacement in case it is completely destroyed. If the cost to rebuild your home exceeds your insurance policy’s coverage limit, then you are responsible to pay the rest out-of-pocket. The fluctuating market of material costs and labor costs will play a factor. 

That’s where Extended Dwelling Coverage comes in. Extended Dwelling Coverage is an add-on to your homeowner’s insurance policy that gives you additional coverage for the replacement of your home even if the costs exceed the Dwelling Coverage policy limits. You can often choose the amount of extended coverage you want for a minor increase in your insurance premium fees. 

Why Get Extended Dwelling Coverage? 

Extended Dwelling Coverage certainly offers peace of mind regarding one’s future financial stability. While you might think this type of add-on would come at a steep price, it really doesn’t. In most cases, Extended Dwelling Coverage adds less than $100 annually to your premium cost. For many, this small increase in payment upfront is well worth the potential coverage.  

Examples Where Extended Dwelling Coverage is Needed 

Are you trying to decide if you need Extended Dwelling Coverage? Here are a few factors to consider: 

• Where do you live? If you live in an area of the country that is prone to natural disasters (hurricanes, tornadoes, fires, etc.), then you should consider getting Extended Dwelling Coverage. 
• What is your financial health? Are you willing or able to cover the out-of-pocket costs to replace your home in case it’s needed? If not, then you should definitely consider Extended Dwelling Coverage. 
• How much do you value peace of mind? If the potential of needing to pay thousands of dollars out-of-pocket doesn’t bother you, then you might not need additional coverage. But, if you want peace of mind regarding your financial future, then Extended Dwelling Coverage is a good option. 

Contact AZCAL Insurance for Your Homeowner’s Insurance 

Are you looking into buying a home or switching your current homeowner’s insurance policy? Make sure you contact AZCAL Insurance Services for all of your homeowner’s insurance needs. Our team guarantees exceptional service every step of the way.