Mississippi Property & Casualty Practice Exam

What type of coverage does not exist under a dwelling policy?

1. Liability coverage

2. Property coverage

3. Personal property coverage

4. Replacement cost coverage

The correct answer is: Liability coverage

In a dwelling policy, liability coverage is indeed not included as part of the standard provisions. A dwelling policy primarily focuses on providing coverage for property, specifically for the physical structure of a residence and certain other structures on the property. Property coverage protects against risks such as fire, theft, and certain types of water damage, while personal property coverage applies to personal belongings within the dwelling. Replacement cost coverage is an option that can apply to property coverage, allowing for the coverage amount to reflect the cost to replace the damaged property with new items of similar kind and quality without deducting for depreciation. Thus, while replacement cost and property-related coverage are critical aspects of dwelling policies, liability coverage, which protects against claims of bodily injury or property damage to third parties, does not form part of the standard dwelling policy offerings. This distinction is essential for policyholders to understand, as those seeking liability protection would need to look to other types of insurance, such as a homeowners policy or a separate personal liability policy.