In what way does a personal liability supplement extend a Dwelling Policy?

A personal liability supplement enhances a Dwelling Policy primarily by expanding the liability coverage available to the policyholder. This means that it not only provides higher limits for personal liability claims but also may include additional protections that are not covered under the base policy.

These enhancements are significant because the standard Dwelling Policy typically covers only limited liability exposure. By adding this supplement, policyholders can safeguard themselves against various scenarios that could lead to financial loss due to third-party claims, such as bodily injury or property damage for which they may be held liable.

While the other options touch on aspects of coverage, they do not accurately reflect the purpose of a personal liability supplement in the context of a Dwelling Policy. Theft coverage pertains to personal property, natural disaster coverage is not directly related to liability, and rental income protection addresses different needs and is typically covered under endorsements or separate policies. Hence, the enhancement of liability coverage with higher limits and additional protections is the key benefit of the personal liability supplement.