Mississippi Property & Casualty Practice Exam

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How many borders and apartments can a dwelling policy cover?

Five borders; three apartments
Three borders; four apartments
Four borders; five apartments
Five borders; four apartments

The correct answer is: Five borders; four apartments

A dwelling policy is specifically designed to provide coverage for properties that are not exclusively owner-occupied. It offers flexibility in terms of the occupancy of the property, which can include a variety of rental situations. In this context, a dwelling policy can cover a maximum of five borders, which refers to the individuals who are renting rooms in the home or dwelling. This provision is essential for landlords who may be renting out rooms to multiple tenants. Additionally, the policy can cover up to four apartments. This is pertinent for properties that are structured as multi-family residences, where separate living units are rented out to different tenants. The coverage for apartments allows property owners to ensure their investment is protected across several living spaces, reflecting the use of the building. Both of these limits aim to create a balance between providing coverage for multiple occupants while still maintaining the integrity and manageability of the insurance policy. This defines how landlords and property owners can effectively use dwelling policies to protect their investments in rental properties.