Which of the following best describes the coverage limits in a Dwelling Policy?

The correct choice highlights that coverage limits in a Dwelling Policy can be adjusted through endorsements. Endorsements are modifications that can be added to a policy to expand or modify coverage as needed. This flexibility allows policyholders to tailor their coverage to better fit their individual needs, such as increasing limits for specific types of coverage or adding additional types of coverage that may not be included in the standard policy.

Unlike predetermined limits that cannot be altered or fixed amounts that do not account for inflation, endorsements provide a mechanism for policyholders to proactively manage and adapt their coverage according to changes in property values or personal circumstances. This adaptability is crucial for maintaining adequate protection as the costs associated with housing and repairs can fluctuate over time.