In a Dwelling Flood policy, which of the following statements is correct?

In a Dwelling Flood policy, the statement regarding primary residences being covered at replacement cost on building losses is accurate. This means that if a primary residence sustains damage due to flooding, the insurance policy will provide the cost to replace the damaged structure with a new one of similar kind and quality, up to the limits specified in the policy. This is an important aspect as it allows homeowners to rebuild and recover from flood damage without incurring significant out-of-pocket expenses for depreciation of the property, which can be a critical factor in a recovery scenario.

Understanding the coverage distinctions in flood insurance is vital, particularly as it pertains to primary and secondary residences. Typically, the coverage levels and conditions may vary for secondary residences, which could be why that particular option does not hold true. Additionally, while contents may have specific coverage conditions, claiming they are never covered for replacement cost is inaccurate since some policies do offer that coverage under certain circumstances. Lastly, the assertion that only commercial properties can be insured does not align with the purpose of a Dwelling Flood policy, which is explicitly designed to cover residential structures against flood risks. Thus, option B stands out as the correct statement in the context of dwelling flood insurance.