What is a common limitation of dwelling policies compared to homeowners insurance?

Dwelling policies are designed primarily to provide coverage for the physical structure of a home that is not owner-occupied, such as rental properties or seasonal residences. One common limitation of dwelling policies in comparison to homeowners insurance is that they typically offer narrower coverage options.

Homeowners insurance generally includes a broader range of coverages, encompassing not only the dwelling but also personal property, liability protection, additional living expenses, and more comprehensive peril coverage. Conversely, dwelling policies focus mainly on protecting the structure itself and may not automatically include personal property protection or robust liability coverage unless explicitly added.

This narrower scope can limit the policyholder’s overall protection compared to a homeowners policy, which is crafted with a more comprehensive approach to covering both property and liability exposure for owner-occupied residences.