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Flashcards in The Dwelling Policy Deck (38)
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A comprehensive insurance package. It might include protection a particular insurance buyer does not actually need, such as loss assessment coverage or grave markers coverage. policy cannot select the coverages they want and eliminate the remaining coverages to save money.

Homeowners Policy


These policies cover only basic property insurance with additional coverages available through a wide range of endorsements. The insured can choose the coverages he or she wants to buy.

Dwelling Policy


Fire, lightning, and internal explosion are the only standard perils under this form, with optional extended coverage perils (windstorm or hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, and volcanic eruption) and vandalism and malicious mischief coverage also available.

Limited property insurance coverage is available with the Dwelling Property 1. Basic Form (DP 00 01) or DP 1 for short.


This named perils form includes the DP 1 perils, plus seven additional perils, such as falling objects and the weight of ice, snow, or sleet.

Broader coverage is available with the Dwelling Property 2. Broad Form (DP 00 02) or DP 2.


The DP 3’s personal property coverage is the same as in the DP 2.

Open perils building coverage is provided by the Dwelling Property 3. Special Form (DP 00 03) or DP 3.


Dwelling policies may include the following coverages

- Dwelling
- Other Structures
- Personal Property
- Fair Rental Value
- Additional Living Expenses


Dwelling policy coverage A:



Dwelling policy coverage B:

Other Structures


Dwelling policy coverage C:

Personal Property


Dwelling policy coverage D:

Fair Rental Value


Dwelling policy coverage E:

Additional Living Expenses


DP 1 form includes:

A, B, C and D cvgs


DP 2 and 3 form includes

A, B, C, D and E


Concerns the dwelling listed in the declarations. This coverage also applies to structures attached to the dwelling, such as an attached garage or toolshed. Items permanently attached to the dwelling, like wall-to-wall carpeting installed over an unfinished floor, are considered part of the dwelling.

Coverage A: (Dwelling)


applies to structures on the residence premises that are separate and distinct from the dwelling by a clear space, or connected to the dwelling by only a fence, wall, wire, or related connection.

Coverage B: (Other Structures)


Property such as furniture, computers, clothing, and stereo equipment are insured. As in the homeowners policy, there are sublimits for some of this property. In addition, certain property is not covered at all.

Coverage C: (Personal Property)


covers the fair rental value of the property, less any expenses—such as the electric bill—that do not continue while any part of the building normally rented or held for rental is uninhabitable.

Coverage D: ( Fair Rental Value)


If a covered loss results in the residence premises being unfit to live in. Covers any necessary increase in living expenses to allow the household to maintain its normal standard of living. Examples of these expenses are hotel charges and restaurant bills above the normal cost of groceries.

Coverage E: (Additional Living Expenses)


group of perils includes fire, lightning, and internal explosion, all of which are mandatory coverages under this.

DP1 Basic Form 1st group of perils


group of perils—extended coverage perils—applies only if a premium is shown in the declarations for these perils. These perils include: windstorm or hail, explosion (replaces internal explosion peril), riot/ civil commotion, aircraft, vehicles, smoke and volcanic eruption.

DP1 Basic Form 2nd group of perils


group of perils includes vandalism and malicious mischief and applies if a premium is listed in the declarations for these perils.

DP1 Basic Form 3rd group of perils. Requires 2nd group


The DP 2 form includes coverage for all three groups of named perils in the DP 1 form, plus the following named perils for the dwelling, other structures, and personal property losses:

- burglary damage
•falling objects
•weight of ice, snow, or sleet
•accidental discharge or overflow of water or steam from within a plumbing, heating, air-conditioning or sprinkler system, or a household appliance
•sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, an air-conditioning or sprinkler system, or an appliance for heating water
•freezing of a plumbing, heating, air-conditioning, or sprinkler system, or a household appliance
•sudden and accidental damage from artificially generated electrical current


form provides open perils coverage, rather than named perils coverage, for the dwelling and other structures. Personal property, however, is still covered on a named perils basis, with the same perils as those covered under the DP 2.

DP 3 Special Form


The valuation provision of the DP 3 is the same as that of the DP 2. The dwelling and other structures are covered on a(n) __ basis.

Replacement cost basis.


The valuation provision of the DP 3 is the same as that of the DP 2. personal property, awnings, carpeting, household appliances, outdoor equipment and antennas, and nonbuilding structures are covered on a(n) ___ basis.

Actual cash value


The general exclusions section of the DP 3 form, the most popular dwelling form, contains X property exclusions: X apply to all property coverages and X apply only to dwelling and other structures coverage.

contains 12 property exclusions
9 apply to all property coverages
3 apply only to the dwelling and other structures coverage


The first 9 exclusions apply to all property coverages. These losses are excluded regardless of any other cause contributing concurrently or in any sequence to the loss.

- Ordinance or Law
- Earth Movement
- Water Damage
- Power Failure
- Neglect
- War
- Nuclear Hazard
- Intentional Loss
- Governmental Action


Like the HO 3, the DP 3 provides a limited amount of coverage for this peril in the other coverages section.

Ordinance or Law


The water damage exclusion includes three categories:

- any loss from flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these
- any loss from water or waterborne material that backs up through sewers or drains or which overflows from a sump
- any loss from water or waterborne material below the surface of the ground (e.g., an underground spring), including water that exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool, or other structure


The last 3 exclusions apply only to property described under the dwelling and other structures section.

- Weather Conditions
- Acts or Decisions
- Faulty, inadequate or defective processes, procedures,
materials or maintenance