State Farm Insurance License Practice Exam

Which of the following coverages is excluded on a basic dwelling policy?

1. Personal property

2. Liability

3. Theft and vandalism

4. Natural disasters

The correct answer is: Theft and vandalism

In a basic dwelling policy, certain coverages are not included, and theft and vandalism are primary exclusions. A basic dwelling policy, often referred to as a DP-1 policy, provides coverage for specific named perils, and in most cases, theft and vandalism are not among those explicitly covered events. This means that homeowners would need additional coverage or a different type of policy to ensure financial protection against losses due to theft or vandalism. Personal property is typically excluded in a basic dwelling policy unless specifically added, meaning coverage for the belongings within the dwelling is not automatically included. Liability coverage is crucial for protecting homeowners against injuries or damages occurring on their property and is often provided in other policy types but not inherently in a basic dwelling policy. Natural disasters, such as floods or earthquakes, usually require separate policies or endorsements, but this does not apply to the same extent as theft and vandalism within this specific policy context.