Dwelling and Homeowners Policies
Dwelling forms (DP-1, DP-2, DP-3)
Dwelling policies cover the structure but not liability, and are written on a non-owner-occupied or tenant basis. Coverage A is the dwelling; B other structures (typically 10% of A); C personal property; D fair rental value; E additional living expense. DP-1 is basic named peril, DP-2 broad named peril, DP-3 is open peril on the dwelling with named perils on personal property.
Homeowners forms
Know the lineup: HO-2 (broad named peril), HO-3 (open peril on the dwelling, named peril on contents - the most common), HO-5 (comprehensive, open peril on both), HO-4 (renters, contents and liability only), HO-6 (condo unit-owners), HO-8 (modified form for older homes). Standard structure in HO-3: A dwelling, B other structures 10% of A, C personal property 50% of A, D loss of use 30% of A, E personal liability $100,000, F medical payments to others $1,000.
Limits, conditions, exclusions
Special limits trip up candidates: money about $200, theft of jewelry/furs about $1,500, theft of firearms about $2,500, theft of silverware about $2,500. Off-premises personal property is typically limited to 10% of Coverage C. The replacement cost condition requires carrying at least 80% of the dwelling's full replacement cost to collect full RCV on partial losses. Section II excludes business activities, intentional injury, and auto/aircraft/watercraft liability.
Worked example: Coverage A is $300,000, so 80% is $240,000. The insured carries $180,000 and has a $50,000 covered loss. Because the amount carried is below 80%, the loss is settled at the greater of ACV or (180,000 ÷ 240,000) × 50,000 = $37,500, less the deductible.