Why is there often a difference in minimum requirements for Dwelling and Homeowners policies?

The reason there is often a difference in minimum requirements between Dwelling and Homeowners policies is because Homeowners policies are designed to provide broader coverage.

Homeowners policies typically encompass not just the structure of the home, but also personal property, liability coverage, and additional living expenses in case the home becomes uninhabitable due to a covered loss. This comprehensive approach necessitates different minimum requirements compared to Dwelling policies, which primarily focus on the physical structure itself and provide more limited coverage options.

While it's true that some Dwelling policies can sometimes be used for commercial properties and that they differ in the specific benefits they cover, these factors are secondary when considering the overarching purpose of the policies. The Homeowners policy is specifically tailored to address the needs of residential property owners in a more inclusive manner than Dwelling policies. Therefore, the distinction in minimum requirements stems from the broader scope of coverage offered by Homeowners policies.