In a dwelling policy, which statement is true regarding personal liability coverage?

The statement that personal liability coverage must be added as a supplement or written as a separate policy in a dwelling policy is correct because dwelling policies primarily provide coverage for the structure itself and may not include personal liability coverage by default. Unlike homeowners insurance, which typically bundles property coverage with personal liability, dwelling policies focus on property protection and require an additional step to obtain liability coverage.

This means that if a policyholder wants protection against legal claims arising from injuries or damages to third parties on the property, they must either add personal liability coverage to their dwelling policy or purchase a separate liability policy. This is an important distinction for homeowners and property owners to understand when selecting and customizing their insurance coverage.