Dwelling Policy
Eligibility and structure
The dwelling program insures 1–4 family dwellings, owner-occupied or rented to others, and does not insure a boarding house or a dwelling used for business occupancy. Dwelling forms are property-only; personal liability and medical payments must be added by a personal liability supplement. Coverages are A Dwelling, B Other Structures (typically 10% of A), C Personal Property (typically 50% of A), and D Fair Rental Value.
The three forms
DP-1 (basic) covers named perils on an actual cash value basis. DP-2 (broad) adds the broad-form perils plus glass breakage, falling objects, weight of ice, snow or sleet, accidental discharge of water, and freezing. DP-3 (special) covers the dwelling and other structures on an open-peril basis, while personal property remains named-peril unless a replacement cost or special-form endorsement is added.
Traps that show up in questions
- The dwelling program does not include theft coverage; a theft endorsement is required.
- Dwelling forms contain no coinsurance clause - limits and percentage relationships control instead.
- Fair rental value applies to rented portions; additional living expense applies to the owner's own occupancy, and the two are not interchangeable.
- Vandalism and other perils may be suspended if the dwelling is vacant beyond the stated period.
- A mortgagee clause protects the lender's interest independently of the insured's conduct.
Worked example
Coverage A is $200,000, so Coverage B is $20,000. A detached garage valued at $35,000 is damaged by a covered windstorm; only $20,000 is available unless Coverage B was increased. Rule of thumb: always check the percentage relationships before totaling the loss.