If your insured is looking for dwelling insurance coverage it should be for a property that is an investment, or if they have rental properties, or if they are covering a vacation home. This type of coverage is for very basic coverage and the premium is usually very low.
Dwelling insurance coverage is intended to cover nothing more than the structure. In the event of a loss caused by a covered peril it will pay to repair or replace the structure. Be sure your insured knows that the limit of liability they choose should be only for the structure above ground and no land value.
Dwelling insurance coverage is much less expensive than homeowners’ coverage because it covers a lot less. There is no liability coverage and no personal property coverage either. Your insured may have the choice of picking either actual cash value or replacement cost in regards to the limit of liability. Unless the dwelling is a new structure the replacement cost will likely be the better choice. What it would cost to replace or repair a structure at today’s prices may be substantially different than the actual cash value of the dwelling.
Talk with your underwriter for how to best calculate the limit of liability for the dwelling. Picking a limit too high or too low could penalize your insured if there were to be a loss.