Dwelling Policy (DP)
The Dwelling program insures residential property, including rentals and homes that do not qualify for a Homeowners policy. This chapter covers the DP forms, the standardized coverage letters, and how the Dwelling policy differs from Homeowners coverage.
Purpose and Eligibility
Dwelling policies (DP forms) are primarily property policies for residences, and they are flexible enough to cover rental (non-owner-occupied) dwellings, seasonal homes, and homes that do not fit standard Homeowners eligibility. Unlike a Homeowners policy, a Dwelling policy does not automatically include personal liability or medical payments coverage; those must be 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 the narrowest and least expensive. The Broad form (DP-2) adds more named perils and typically 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. Broader forms cost more but reduce the chance of an uncovered cause of loss.
Coverage Structure
The Dwelling program uses standardized coverages: Coverage A insures the dwelling structure, Coverage B insures other structures such as a detached garage, 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 and additional living expense address different insureds, a landlord versus a resident owner, so it is important to match the coverage to who suffers the loss.