Home insurance
When it comes to protecting your home, dwelling building coverage (also known as Coverage A) is one of the most important parts of your home insurance policy. It helps cover the cost to rebuild or repair the physical structure of your home if it’s ever damaged by an unexpected event.
In this blog, we’ll break down what dwelling building coverage includes, how to calculate how much coverage you need, and when you might want to reassess your coverage.
Key takeaways
Dwelling building coverage (Coverage A) pays to repair or rebuild the structure of your home if it’s damaged by a covered event, such as a fire. Your coverage limit should reflect the full cost to rebuild your home from the ground up using similar materials and labour at today’s prices. It’s important to review and adjust this amount every few years to ensure it continues to meet your needs.
What does dwelling building coverage mean?
In insurance, the term “dwelling building” refers to the main structure of your home, including the walls, roof, foundation, floors, windows, and built-in fixtures like cabinetry and plumbing. Therefore, dwelling building coverage is designed to cover the cost to repair or rebuild that structure if it’s damaged by a covered event, such as a wildfire.
Dwelling building coverage, which may also be referred to as Coverage A, is one of the four types of coverage that make up Section 1: Property Coverages in a standard homeowners insurance policy in Canada. While these coverages work together to protect homeowners from some of the most common and costly risks related to property damage and loss, it’s important to understand the key differences in what each covers.
Coverage A
- Also known as dwelling building coverage
- Covers the main structure of your home
- Typically includes walls, roof, foundation, windows, and built-in features like cabinetry
Coverage B
- Also known as detached structures coverage
- Covers structures on your property that are not attached to your home
- Typically includes sheds, fences, detached garages, and garden walls
Coverage C
- Also known as contents insurance or personal belongings coverage
- Covers the possessions you own inside your home
- Typically includes furniture, electronics, clothing, and appliances
Coverage D
- Also known as additional living expenses coverage
- Covers costs related to temporary living if your home becomes uninhabitable
- Typically includes hotel stays, meals, and other necessary living expenses
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What does dwelling building coverage cover?
Dwelling building coverage protects the physical structure of your home and certain permanently attached features. This can include:
- The structure of the main house, including the foundation, walls, roof, windows, doors, and other structural components
- Attached structures like garages, decks, and porches
- Built-in systems like plumbing, electrical wiring, furnace, water heater, and central air conditioner
- Permanently attached fixtures, like built-in cabinetry, countertops, and bathroom vanities
What’s not covered?
Dwelling building coverage is designed to cover damage caused by sudden and unexpected events, like a house fire, lightning strike, fallen tree, or vandalism. It typically does not cover:
- The land your home sits on
- Detached structures (ex. sheds or fences)
- Temporary structures (ex. gazebos or tents)
- Your personal belongings (ex. appliances)
- Damage caused by pests (ex. Mice, racoons, termites, etc.)
- Maintenance issues due to neglect or poor upkeep (ex. mold, rot, or water damage)
- Normal wear and tear or gradual deterioration
- Routine maintenance costs
How to calculate how much dwelling building coverage you need
Generally speaking, you need enough dwelling building coverage to rebuild your home from scratch, using similar materials and labour at today’s prices. This is known as the rebuild cost, and it’s different from your home’s market value, which also factors in:
- Land value
- Local real estate trends, school zones, and neighbourhood demands
- Overall property appreciation or depreciation
For example, if you bought your home for $800,000, it might only cost $450,000 to rebuild the structure. Fortunately, you rarely need to calculate the rebuilding cost yourself, as most insurance providers automatically estimate it for you based on the information you provide when getting a quote. That’s why it’s important to provide accurate property information, like:
- Square footage
- Number of storeys
- Foundation type
- Exterior materials
- Roof type and material
- Interior finishes
That said, you’ll usually be able to adjust this amount within a specific range if needed. Also, if it’s necessary, you may use a tool like CostCertified or Craftsman’s National Building Cost Manual to get a cost-per-square-foot estimate. Just be sure to take location-based cost differences into account.
For reference, in 2025, the average construction cost for a new home in Canada ranges between $200,000 and $500,000. However, depending on the size, location, and materials used, your rebuild cost could be slightly higher. Large or custom-built homes in big cities like Toronto or Vancouver might cost over $750,000 to fully rebuild.
When to re-evaluate your dwelling building coverage
To make sure you’re not overpaying or underinsured, you should re-evaluate how much dwelling building coverage you need when:
- Your policy is up for renewal
- Your switch insurance providers
- You complete renovations or upgrades
- Inflation rises significantly
- Construction or labour costs increase in your area
If your home’s rebuild cost is close to or over $750,000, consider getting a formal replacement cost assessment from a licensed appraiser or contractor. This small step can make a big difference if you ever need to file an insurance claim.
