State Farm Fire Independent Policy Practice Exam

True or False: Damage to a detached building used for business would be covered under the Dwelling Extension coverage of an HO-3 policy if the owner works part-time.

1. True

2. False

The correct answer is: False

In the context of an HO-3 policy, the Dwelling Extension coverage is primarily designed to provide protection for specific structures that are incidental to the main insured dwelling, such as garages or sheds that are not used for business purposes. While the policy does cover certain types of detached structures, the key limitation is regarding their use. If a detached building is being used for business purposes, even on a part-time basis, it typically falls outside the scope of coverage offered under the Dwelling Extension provision. This is because the policy specifically excludes coverage for structures used in business activities, which would apply regardless of whether the business activities are full-time or part-time. Thus, damage to a detached building used for business, even if the owner works part-time, would not be covered under the Dwelling Extension coverage of an HO-3 policy.