What can be the impact of changing a property's use on dwelling policy coverage?

Changing a property's use can significantly impact coverage under a dwelling policy because insurance policies are tailored to the specific risks associated with a property's designated use. When a property's use changes—such as converting a residence into a rental property or a commercial space—the underwriting criteria that the insurer uses to evaluate risk also alters.

Different uses expose the property to varying levels of risk. For example, a residence typically has different risks compared to a rental unit or a commercial establishment, often leading to adjustments in the coverage terms or limitations. This can result in certain perils not being covered or may require the policyholder to acquire additional coverage or endorsements to ensure adequate protection.

As a result, understanding how a change in usage relates to coverage is crucial for maintaining appropriate insurance safeguards and ensuring that the policyholder is adequately covered for any potential claims that could arise from the property's new use.