Dwelling Policy Practice Test

In a dwelling policy, which of the following would generally be excluded from Coverage C?

1. Property of the insured

2. Personal property of guests

3. Personal property stored in a basement

4. Property used for business purposes

The correct answer is: Property used for business purposes

Coverage C in a dwelling policy specifically pertains to personal property coverage. However, it has certain exclusions to limit what is covered under that section. Property used for business purposes is distinctly excluded from Coverage C. This exclusion is in place because dwelling policies are typically designed for residential properties, and personal property used for business could pose a higher risk than what the policy intends to cover. This limitation helps to ensure that claims are primarily related to residential use rather than business-related activities, which often require different types of policies, such as business owner policies or commercial property insurance. Other options, while they may have certain limitations under specific circumstances, do not fall under the broader exclusion that applies to property used for business purposes. For instance, personal property of the insured or guests may be covered, and personal property stored in a basement could still fall within the scope of Coverage C depending on the policy specifics.