What provides coverage for additional living expenses in a dwelling policy if a covered peril makes the dwelling uninhabitable?

The correct answer is Coverage D. This coverage is specifically designed to provide financial support for additional living expenses when a dwelling becomes uninhabitable due to a covered peril. In the context of a dwelling policy, Coverage D is often referred to as "Loss of Use" protection. It helps policyholders pay for temporary housing, increased living costs, and other expenses incurred while their home is being repaired or rebuilt following an insured loss.

Understanding the role of Coverage D is critical for homeowners because it ensures that they have the means to maintain a standard of living during a difficult time. This can include costs like hotel stays, meal expenses if they can't cook at home, and other necessary expenses arising from the displacement. Hence, recognizing Coverage D's importance in a dwelling policy is essential for effective risk management and financial planning in the face of unexpected property damage.