A fire destroys a homeowner's garage. If the cost to replace the garage exceeds the dwelling limit, what typically happens?

When a fire destroys a homeowner's garage, and the cost to replace the garage exceeds the dwelling limit, the insurer generally pays only up to the dwelling limit. This means that the maximum amount the homeowner can receive for the damages to the garage is capped at the limit set for the dwelling in the homeowner's insurance policy.

This situation reflects the structured nature of homeowner’s insurance, where specific limits are placed on various aspects of coverage, such as the dwelling, other structures, and personal property. If the cost of repairs or replacement surpasses the dwelling limit, the policy will not provide additional coverage for the excess amount.

The choices involving coverage under personal property or payment based on replacement value do not apply to the garage in this case, as the coverage for structures like garages is typically governed under the dwelling limit. Hence, any loss exceeding this limit would not be compensated beyond the predetermined coverage.