Dwelling Policy
What a dwelling policy is
The dwelling program is a property-only line for 1-4 family residences that are owner-occupied or rented to others, plus the contents of a rented apartment. Its biggest exam trap: there is no Section II liability coverage - no personal liability, no medical payments.
The forms
- DP-1 (Basic): named perils, actual cash value.
- DP-2 (Broad): broadened named perils; replacement cost may be added.
- DP-3 (Special): open peril on the dwelling and other structures; theft and glass get their own treatment.
Coverages
A - Dwelling; B - Other Structures (typically 10% of A); C - Personal Property (a percentage of A shown in the declarations, commonly 50%); D - Fair Rental Value; E - Additional Living Expense on the broader forms.
Loss settlement
DP-1 settles at ACV. DP-2 and DP-3 may pay replacement cost on the dwelling, often with an extended replacement cost option. Personal property is generally ACV unless endorsed. Coverage B is a percentage sublimit and does not add to the Coverage A limit unless endorsed.
Conditions and traps
Coverage D pays the fair rental value of the rented dwelling - different from a homeowner's loss of use. Vacancy, typically 60 consecutive days, restricts theft, vandalism, and glass coverage. Theft coverage is limited away from the premises and for dwellings rented to others.
Worked example: A DP-3 with Coverage A of $200,000 gives $20,000 for other structures. A detached garage burns with $25,000 damage: the insurer pays $20,000, because Coverage B is a sublimit, not an addition.