Your home’s rebuild cost could be far higher than you think—here’s why getting your Coverage A limit right is critical.
By: Mike Lloyd
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Summary
What Coverage A Really Covers
Coverage A insures the cost to rebuild your primary residence and attached structures—not the market value of your home. It’s the cornerstone of your homeowner’s policy, and getting it wrong can leave you exposed.
Rebuild Costs Are Rising and Complex
Labor shortages, material inflation, stricter building codes, and unique architectural details all contribute to rapidly increasing replacement costs—especially in high-end homes. Your Coverage A limit needs to reflect this reality.
Underinsurance Isn’t Just a Total Loss Problem
Even partial damage can expose gaps in your policy. Without enough coverage, you may only be reimbursed for basic repairs, not the full cost to restore custom features or contiguous finishes.
Not All Coverage A Limits Are Equal
Some policies default to actual cash value instead of replacement cost, unless specifically structured otherwise. Always confirm how your coverage is calculated, and whether it includes matching, code upgrades, and inflation protections.
Post-Bind Assessments Help You Get It Right
Many high-net-worth carriers conduct home assessments after binding to fine-tune your dwelling limit. These in-person visits help uncover hidden rebuild costs and reduce the risk of underinsurance.
How PVIG Protects You
At PVIG, we partner with premium carriers, use square-foot rebuild calculators, and proactively adjust limits to reflect real-world risks. We make sure your policy is built for what it would cost to truly rebuild—not just patch up.
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Coverage A, or dwelling coverage, covers the cost to rebuild your primary residence and any directly attached structures, such as garages or decks, in case of damage or destruction.
It’s the foundation of your homeowner’s insurance, and often a benchmark for determining your other coverage limits.
Despite its importance, many homeowners don’t understand why their Coverage A limit may be too low until it’s too late.
Many people incorrectly assume their home’s Coverage A limit should simply mirror its market value. In reality, the cost of rebuilding your home today will be dictated by a wide range of considerations, including (but not limited to):
This is especially true for high-end homes, which often have unique features that are not quick nor easy to replace. These elements raise the cost of reconstruction, as well as likely causing it to take longer to rebuild accurately.
Note:
Not all policies automatically insure your home at full replacement cost. While most high-net-worth carriers structure Coverage A based on detailed replacement cost calculations, some standard or older policies may only offer actual cash value or limited coverage unless specifically upgraded. This is why it’s critical to verify not just your limit—but the valuation method your insurer uses.
There are many other costs within reconstruction that may surprise you and lead you to be underinsured. Even when a home isn’t totally destroyed, partial losses can be expensive to address. Matching materials, maintaining contiguous finishes, and replacing historic features may require a full rebuild or custom reproduction. Although damage to your home may be localized, it’s likely that construction throughout the home may be necessary, or that custom fixtures will have to be specially crafted or imported.
It’s important that your insurance reflects these considerations, and without a large enough Coverage A limit, your policy may only pay to repair what was damaged. This means you may be left with incongruous materials or incomplete restorations even if your policy technically covers the direct damages.