Dwelling Policy (DP)
The Dwelling program insures residential property, including rental homes and dwellings that do not qualify for a Homeowners policy. This chapter covers the DP forms, the coverage letters, and how the Dwelling policy differs from a Homeowners policy.
Purpose and Eligibility
Dwelling policies (DP forms) are primarily property policies for residences and are flexible enough to cover rental (non-owner-occupied) homes, seasonal dwellings, and homes that do not fit Homeowners eligibility. Unlike a Homeowners policy, a Dwelling policy does not automatically include personal liability or medical payments coverage; those are added by endorsement. This makes the DP a common choice for landlords who need building and rental-income protection.
The Three Dwelling Forms
The Basic form (DP-1) covers a short list of named perils and is narrowest. The Broad form (DP-2) adds more named perils and often provides replacement cost on the dwelling. The Special form (DP-3) is broadest, insuring the dwelling and other structures on an open-perils basis while covering personal property on a named-perils basis. Choosing a broader form reduces the chance of an uncovered cause of loss but raises premium.
Coverage Letters
The Dwelling program uses standardized coverages: Coverage A insures the dwelling, Coverage B insures other structures, Coverage C insures personal property, Coverage D provides fair rental value when a rented dwelling becomes uninhabitable, and Coverage E provides additional living expense for an owner-occupant. Fair rental value protects a landlord's income while additional living expense protects a resident owner, so it is important to match the coverage to who actually suffers the loss.