What type of internal disaster does the basic dwelling policy automatically cover?

The basic dwelling policy automatically covers internal disasters primarily related to fire. Fire is one of the most common and significant risks that homeowners face, and insurance policies are specifically designed to provide coverage for damages caused by fire incidents. In the context of dwelling policies, coverage for fire encompasses both damage to the dwelling itself and any personal property affected by the fire.

Explosion can sometimes be associated with fire, but it is not specifically identified as a covered peril under the basic dwelling policy; rather, it typically falls under broader categories and may be covered depending on the specific circumstances. Flood is considered a separate risk that requires its own specific flood insurance policy and is not covered by standard dwelling policies. Theft, while also a potential risk, is not included in the basic dwelling policy's perils either.

Thus, fire stands out as the correct answer because it is explicitly covered by the basic dwelling policy, whereas the other options do not align with the automatic coverage provided by such a policy.