Your homeowners’ policy protects you if your house burns down as a result of fire, for example – fire as a result of a forest fire, lightning or electrical fire. The dwelling limit on your policy means the carrier will pay you upto that limit to build your house. This is also called coverage A.
With many Insurance carriers, you can opt to add an additional replacement cost option for an additional premium, that will increase the dwelling limit amount. An electrical fire, for example, due to electrical wiring that is hidden in the wall that you cannot see or expect would be covered but fire due to negligence or poor maintenance is not covered. Not saying that fire caused by appliances will not be covered, if you have well-maintained appliances it should be covered.
You must have heard about adjusters coming in after a claim. They are there to assess the extent of damage as well as the cause. Anytime a carrier finds negligence or intentional harm, a claim is not covered.
Feel free to ask additional questions from your agent.