In a dwelling policy, what is the maximum number of families permitted?

In a dwelling policy, the maximum number of families that can be accommodated is limited to four. This policy is typically designed for residential properties that are owner-occupied, rented, or used as a secondary residence. The four-family limit reflects the intent of the dwelling policy to cover properties that can be classified as multi-family housing but are still primarily residential in nature.

When insurers establish coverage limits, they aim to apply suitable underwriting practices and risk assessment. By allowing up to four families, the dwelling policy can help cover duplexes, triplexes, and fourplexes effectively while ensuring that the property is maintained as a residential dwelling rather than a commercial complex.

This limit distinguishes the dwelling policy from other forms of property insurance, such as commercial policies, which can accommodate larger multi-family buildings and more intensive commercial operations. Therefore, understanding this limitation is critical for anyone involved in insuring residential properties.