Under which condition might a dwelling policy not cover personal property?

A dwelling policy typically does not cover personal property when the property is rented out to others. This limitation exists because dwelling policies are primarily designed to insure properties that are owner-occupied or used as a primary residence, rather than those generating rental income. When a property is rented out, the insurance company may require a different type of policy—like a landlord policy—that better fits the needs of rental properties.

The other scenarios presented do not typically exclude coverage under a dwelling policy. Owner-occupied properties are indeed covered under the policy, as are personal belongings stored in a garage on the premises. Additionally, losses due to fire are generally covered, unless specific exclusions are noted in the policy. Thus, the situation where personal property is not covered aligns with rental activity, making it the correct choice.