Dwelling Policy Practice Test

If an insurer broadens coverage in a dwelling policy, how is this change applied?

1. By endorsement

2. Automatically

3. Must be requested by the insured

4. Only at renewal

The correct answer is: Automatically

When an insurer broadens coverage in a dwelling policy, the change is applied automatically. This means that whenever the insurer introduces new benefits or expands existing ones, those enhancements take effect for all policyholders without the need for them to take any action. This automatic application serves to ensure that insured parties immediately gain the advantage of wider coverage without the delay or effort involved in requesting it or waiting for the policy to be renewed. Insurers often provide these updates to maintain competitive advantage and enhance customer satisfaction, allowing policyholders to benefit from improved protections as soon as those changes are implemented.