Which type of dwelling is typically covered under a dwelling policy?

The correct response is that vacation homes are typically covered under a dwelling policy. A dwelling policy is designed to provide coverage for properties that are not occupied as a primary residence. This type of policy is suitable for homeowners who own properties they use occasionally, such as vacation homes, and want protection against losses from perils like fire, theft, or vandalism.

In contrast, condominiums and townhouses often have their own specific insurance requirements and might be insured through a condominium association's master policy, as well as needing individual unit owners to carry homeowners insurance rather than a dwelling policy. While single-family homes can be covered under a dwelling policy, the policy is not exclusive to them and does extend to situations involving other types of dwellings, including vacation homes. Therefore, the specific mention of vacation homes highlights the capacity of a dwelling policy to provide coverage outside a homeowner’s primary living arrangement.