A Dwelling Policy protects a residential property that is not the primary residence of the policyholder. It provides coverage for the structure and, in some cases, personal property within the dwelling. Typically used for rental properties, vacation homes, or secondary homes, they can also apply to homes that are not occupied by the owner.
There are different types of dwelling policies, each offering varying levels of coverage. Three standard forms makeup the desired levels of coverage.
DP-1 (Basic Form)
This is a very basic policy that covers specific risks, usually on a named-perils basis. This means it only covers losses caused by events specifically listed in the policy, such as fire, lightning, windstorm, and hail. It is generally the least expensive option.
DP-2 (Broad Form)
This policy provides a broader range of coverage compared to DP-1. It covers a wider array of perils, including damage caused by vandalism, theft, and falling objects. Like DP-1, it still uses a named-perils approach but includes more coverage options.
DP-3 (Special Form)
The most comprehensive option, DP-3 provides coverage for all risks except those specifically excluded in the policy. This is an open-perils policy, which means it covers any damage unless it’s explicitly listed as an exclusion, such as damage from flooding or earthquakes.
In general, a dwelling policy covers:
Dwelling structure
The physical home or building itself.
Other structures: This includes sheds, garages, fences, and other detached buildings.
Personal property: (if included in the policy) covers belongings inside the dwelling.
Liability protection
Liability protection protects your financial risks and prevents lawsuits when someone is injured on your property.
Unlike homeowners insurance, which typically covers the home and its contents, a dwelling policy may not cover personal liability or offer the same level of coverage for the contents inside. It is important for property owners to evaluate the types of coverage they need and choose the policy that best suits their situation.
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