Dwelling Policy
Policy Overview
The dwelling policy covers residential property that is not eligible for a homeowners policy, such as rental dwellings or homes under construction. Forms include DP-1 (basic), DP-2 (broad), and DP-3 (special). Coverage A covers the dwelling, Coverage B other structures, Coverage C personal property, and Coverage D loss of use. Liability is not included unless added by endorsement.
Perils and Valuation
DP-1 covers basic perils; DP-2 adds broad perils such as falling objects and weight of ice and snow; DP-3 covers the dwelling on an open-peril basis. Personal property is generally valued at actual cash value unless replacement cost is endorsed. The policy includes a coinsurance clause on some forms and a fair rental value provision under Coverage D.
Traps
Questions often assume a dwelling policy includes liability or that DP-3 covers personal property on an open-peril basis. Another trap is confusing Coverage B with Coverage C. Also watch for the rental value calculation under Coverage D.
Rule of Thumb
If the property is rented to others or vacant, choose a dwelling form and verify whether liability and replacement cost endorsements are needed.
Worked Example
A landlord with a DP-3 suffers $10,000 in dwelling damage and $2,000 in contents damage. The dwelling is covered on an open-peril basis; contents are named-peril unless endorsed. The adjuster must confirm the cause of the contents loss against the listed perils.