What is Dwelling Coverage? Dwelling Coverage[dwel-ing / kuhv-er-ij]noun1.Dwelling Coverage is the portion of a Homeowner’s Insurance Policy that covers the physical structure of the insured home. It is the portion of the Policy that may help rebuild the structure of a home if it is damaged. Share | Related Content The Best of Both Worlds Here are a few reasons we’ve chosen to be independent. Did You Know This Fact About Trampolines? Trampolines cause thousands of injuries per year. Protecting Those Who Matter Most The importance of life insurance, how it works, and how much coverage you need.