Dwelling policy forms are monoline policies used to insure residential property. Dwelling property forms are used to insure most dwelling property, including dwellings, in the course of construction. The dwelling may be owner-occupied or non-owner-occupied (rental property). Most dwellings used for residential purposes are eligible for coverage under a dwelling form except farms, structures that have more than four units and any structure used principally for commercial or business purposes. Mobile homes may also be eligible if permanently affixed to a foundation and endorsed.
Currently, the Dwelling '02 program is used in almost every state. This program incorporated language and policy provisions from the Standard Fire policy into a dwelling policy to cover residential property.
The Dwelling '02 program consists of three policy forms, including the:
The difference between these forms lies in the various causes of loss (perils) that each policy covers.
This is a group of eight additional perils, including:
These extended coverages are automatically included in the DP2 and DP3 forms and may be added to the DP1 by endorsement. An acronym commonly utilized to remember these eight extended coverages is WHARVVES.
This policy form provides the most limited coverage for dwellings and their contents as compared to the DP2 and DP3 policies. DP1 covers:
A hostile fire is one that is burning in an area where it should not be burning. If fire escapes from a wood-burning stove and causes damage to other property, there would be coverage. The fire burning within the wood-burning stove is known as a friendly fire since it is burning where it should be. Damage or loss caused by a hostile fire is covered, while damage caused by a friendly fire is not covered. Extended Coverage and Vandalism or Malicious Mischief (V&MM) may be added to the DP1 by endorsement.
The perils insured against in a DP2 policy include all perils covered in a DP1 policy and the perils appearing under Coverage C, named perils covering personal property.
An acronym that can help you remember these is BIG AFFECT, as displayed below.
In addition to the above-named perils, DP2 also provides coverage for Collapse and “Glass or Safety Glazing Material.”
The insurer will cover the breakage of glass or safety glazing material which is part of a covered dwelling, storm door or storm window.
The DP-2 form also includes coverage for the breakage of glass or safety glazing material that is part of a covered building, such as windows or storm doors. There is no dollar or per-pane limit under the ISO Dwelling ’02 form.
The insurer will pay for direct physical loss to covered property involving the collapse of a dwelling (or any part of it) as a result of:
The DP3 is an all-risk policy and provides the broadest protection of all the dwelling fire policies. The DP3 is similar in structure to the DP2 but differs in that it provides open-peril (all-risk) coverage for the dwelling (Coverage A) and other structures (Coverage B), while Coverage C (personal property) remains named peril… An all-risk policy covers all types of direct physical loss EXCEPT those specifically excluded.
This means that under a DP-3 policy, the dwelling and other structures are covered against all perils unless specifically excluded. To determine if a peril is covered, you reference the Exclusions section—if it isn’t listed there, it’s covered.
All policy forms exclude losses from:
DP1, DP2 and DP3 policies all provide four divisions of coverage, sometimes referred to as “insuring agreements.”
This insuring agreement provides coverage for the dwelling principally used for residential purposes (owner or non-owner occupied). Coverage A also includes structures attached to the dwelling, such as an attached garage or carport. Coverage A also protects against loss of materials and supplies on the residence premises used in the construction or repair of the dwelling and outdoor or building equipment used to service the premises (power tools, riding lawnmowers, etc.).
Note: Materials and supplies located on or next to the residence premises that are used for the construction or repair of the dwelling are included under Coverage A. However, structures used for commercial, farming, or manufacturing purposes are not covered.
10% of coverage A applies to structures on the residence premises detached from the dwelling by a clear space. “Other Structures” include:
Exclusions:
Coverage C provides protection for the insured’s personal property owned or used by the named insured or resident family members.
The default Coverage C limit is 50% of the Coverage A (Dwelling) limit for property on the residence premises.
Property away from the premises is covered anywhere in the world, but only up to 10% of the Coverage C limit (or $1,000, whichever is greater).
When personal property is moved to a new principal residence, full Coverage C limits apply at both locations for 30 days
If personal property is moved to a newly acquired principal residence, the property is covered at both locations for thirty days.
Personal property not covered includes:
If part of the covered residence that is held for rental (or actually rented) to others becomes uninhabitable due to a covered loss under Coverage A, B, or C, the contract will pay the fair rental value. The limit is typically 10% of Coverage A by default but may be increased by endorsement at the insured’s request.
Sometimes referred to as “Loss of Use,” this coverage section will pay any increased expenses incurred by the insured if a residence becomes uninhabitable due to a covered loss, and the insured must move out while it is being repaired, replaced, or rebuilt, the contract will pay any necessary increased expenses incurred by the insured.
If civil authority orders the house to be vacated due to an impending insured peril, the insurer will pay additional living expenses for up to two weeks (e.g., if the insured is required to leave home due to a flood, fire, infectious disease, etc.).
Liability Coverage Dwelling policies (DP-1, DP-2, and DP-3) do not include personal liability or medical payments coverage. If the insured wants this protection, it can be added by endorsement through the Personal Liability Supplement (Coverage L) or by purchasing a separate Comprehensive Personal Liability (CPL) policy.
Dwelling policies are monoline policies used to insure residential properties. Here are some key points about dwelling policies:
Most dwelling properties are eligible for coverage, except farms and structures with more than four units or used mainly for commercial purposes. Mobile homes may qualify if permanently affixed and endorsed.
The Dwelling '02 program is utilized in most states, featuring three policy forms: Dwelling Property Basic Form (DP1), Dwelling Property Broad Form (DP2), and Dwelling Property Special Form (DP3).
Extended coverages included in DP2 and DP3 automatically (optional endorsement for DP1) are:
Basic Coverage (DP1) includes coverage for:
Extended Coverage and Vandalism or Malicious Mischief (V&MM) can be added by endorsement.
Dwelling Property Broad Form (DP2) covers more perils than DP1, including all DP1 perils and additional ones like loss due to the weight of ice, snow, and sleet, vandalism by burglars, and accidental discharge or overflow of water or steam.
The Special Form (DP3) is an all-risk policy providing broad protection, covering all types of direct physical loss except for specific exclusions. DP3 provides open-peril coverage for the dwelling (Coverage A) and other structures (Coverage B), but Coverage C remains named peril.
Dwelling policy coverages include:
Exclusions from dwelling policies often include losses from ordinances or laws, water damage, power interruption away from the insured location, and inherent vice. Also excluded are earth movement, neglect, war, nuclear hazard, intentional loss, and mold or dry rot unless caused by a covered peril. Coverage B’s 10 percent limit is not additional insurance under DP-1 but is additional under DP-2 and DP-3
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