re: Home Insurance- Dwelling coverage

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Looking at the quotes coming back, I noticed that the "Dwelling" coverage is over the cost of my house and land by 15-20%

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Because home insurance coverage is based on cost to rebuild the house from scratch....not what you paid or how much your mortgage balance is.

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Google is telling me if under insure, a claim could be prorated. That doesnt make since to me though. ( idk how or why).

is this true? whats the risk of under insuring. I get i could be taken a chance of my house burning down and I would not get the entire replacement cost back, but if a water line brakes and need 30k in repairs, would it still cover that?

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If you're insured below 80% of reconstruction value, then you're considered to be co-insuring for the difference. So if your house would cost $300k to rebuild but you only insured it for $200k, you're self insuring for 1/3 of the value. If you had a pipe burst and cause $30k in damage, insurance is only going to cover $20k of that minus your deductible (and probably minus depreciation too since a policy not written to at least 80% RCV is likely ACV coverage to begin with)

Most home insurers won't write the policy at all though if the coverage amount isn't written to the full rebuild cost though. LA Citizens will let you write at 80% to value on replacement cost coverage policies or you can insured for whatever you please on an actual cash value policy with Citizens, but ACV policies means you'll lose depreciation plus whatever amount of co-insurance based on how much you insure it for vs how much it would cost to rebuild