Georgia Property & Casualty Practice Exam

Which statement about dwelling policies is NOT correct?

1. They have fewer restrictions on eligibility for coverage than homeowners policies.

2. They are well-suited for insuring tenant-occupied dwellings.

3. They allow policyholders to choose the coverages they want to buy.

4. They generally cost more than homeowners policies.

The correct answer is: They generally cost more than homeowners policies.

Dwelling policies serve a unique purpose in the insurance landscape, particularly for properties that do not meet the criteria for homeowners policies, such as rental properties or those that are not owner-occupied. The assertion that dwelling policies generally cost more than homeowners policies is not typically accurate. In fact, dwelling policies often have lower premiums than homeowners policies because they are tailored to cover specific risks, primarily focusing on the property itself rather than the broader range of coverages often included in homeowners policies, such as personal property protection or liability coverage. The other options correctly highlight characteristics of dwelling policies. They are indeed designed with fewer restrictions on eligibility compared to homeowners policies, making them a suitable choice for insuring properties occupied by tenants. Policyholders also have the flexibility to select specific coverages that fit their needs, further emphasizing the customizable nature of dwelling policies.