By default, on what valuation basis are losses to the dwelling settled under the DP-1 Basic Form?
a.Actual cash value (ACV)
b.Replacement cost without depreciation
c.Functional replacement cost
d.Agreed value
Explanation
The DP-1 Basic Form settles losses on an actual cash value (ACV) basis, meaning replacement cost minus depreciation. Replacement cost coverage on the dwelling is generally only available under DP-2 and DP-3 (subject to the 80% coinsurance condition). Agreed value and functional replacement cost are not the default settlement methods on DP-1.
Law Reference: ISO DP-1 Basic FormThis topic, taught in full in the California Property & Casualty Broker-Agent guide. California Property & Casualty Broker-Agent Study Guide — 2026 Edition — PDF + EPUB, $24.99 · 14-day refund →
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