Three dwelling policy forms
DP 1: Basic Form
DP 2: Broad Form
DP 3: Special Form
What does dwelling insurance cover?
Property, not liability. (unless endorsement is added)
Sections of a dwelling policy
- Coverage A- dwelling: (excluded: construction tools, damage to land itself)
- Coverage B- Other structures: limit: 10% of coverage A limit per claim= DP-1: 10% included as part of coverage A limit; DP-2 and DP-3 10% is added to the coverage A limit. Excludes: buildings used for business or farming (unless only storing equipment), buildings rented to someone who is not a tenant of principal dwelling (unless rented as private garage only); gravestones, plots, mausoleums.
- Coverage C- Personal property: located on premises (limit 10% of coverage C limit for off premises property) Excluded: Animals, vehicles, aircraft, hovercraft, boats, paper and electronic data, credit and debit cards, money, grave markers, water or steam
- Coverage D- FRV: pays for rental income lost due to an insured peril; accounts for net loss, not discontinued utilities
- Coverage E- ALE: (For increase in living expenses caused by a loss; maintains insured’s normal standard of living; doesn’t include normal ongoing expenses the insured would be paying anyway; automatically included in DP-2 and DP-3, optional endorsement for DP-1.
- Additional coverages: Debris removal and reasonable repairs (coverage A limit) are included; Ordinance or law (paid in 10% on top of Coverage A) (available on DP-2 and DP-3 only, fire department service charge (Pays in addition to coverage A limit) , trees, shrubs, and plants (in addition to coverage A)are paid on top of any policy limit.
- Exclusions
- Conditions
- Endorsements (if any)
DP-1 Basic Form covers
- named peril coverage
1. ) Fire
2. ) Lightning
3. ) Internal explosion
-Popular endorsements: VMM (intentional injury or destruction of covered property) (other dwelling forms automatically include it) and Extended coverage (adds 9 perils: WCSHAVER acronym)
DP- 2 Broad Form
- Named peril
- Same as Basic Form, plus all of extended form perils (Windstorm, Civil Commotion, Smoke (including from other home or forest fire), Hail, Aircraft, Vehicles (if a vehicle hits the dwelling) and broad form perils
DP-1 Basic Form covers
- named peril coverage
1. ) Fire
2. ) Lightning
3. ) Internal explosion
-Popular endorsements: VMM (intentional injury or destruction of covered property) (other dwelling forms automatically include it) and Extended coverage (adds 9 perils: W.C.SHAVER acronym)
DP- 2 Broad Form
- Named peril
- Same as Basic Form, plus all of extended form perils (Windstorm, Civil Commotion, Smoke (including from other home or forest fire), Hail, Aircraft, Vehicles (if a vehicle hits the dwelling), Volcanic Eruption, External explosion, riot) and broad form perils (VMM, Damage by burglars, Breakage of glass, Falling objects, Weight of ice, snow, or sleet, collapse of buildings, sudden and accidental tearing apart, accidental discharge or overflow of water or steam, freezing, artificially generated electrical currents.
DP- 3 Special Form
- Open peril coverage to structures (If a peril is not excluded, it is covered)
- Named peril coverage to personal property (includes all the perils that the DP-2 covers)
DP-3 exclusions
- General exclusions listed in policy
- Settling, cracking, shrinking, bulging of patios, foundations, etc
- Damage from birds, insects, vermin, domestic animals
- Wind or hail damage to antennas, lawns, trees.
- Ice or snow damage to awnings, fences, outdoor structures, foundations
- Theft of anything not part of structures, foundations
- Theft of anything not part of structure
- Pollutant damage
- gradual or unexpected loss from wear and tear, marring, or deterioration
- mechanical breakdown
- inherrant vice: a characteristic of an item that causes it to damage or destroy itself
- Smoke from agricultural or industrial operations.
APS stands for
Appurtenant Physical Structures (structures not attached to dwelling)
Indirect loss definition
economic loss that results from a direct loss.
Civil authority coverage
Applies when a civil authority prohibits access to dwelling because of damages at a nearby property, but damages must have been caused by a covered peril; FRV and ALE limits are 2 weeks.
Ordinance or law exclusions:
- Any change that decreases value of property
- Any change that requires monitoring or testing
- remediation of pollutants
- Confiscation, seizure, demolition, condemnation or property by government.
Valuation
- DP-1 policies settle Coverages A and B at ACV.
- DP-2 and DP-3 settle coverages A and B at replacement cost if property is insured to at least 80% of value (loss settlement provision is just like HO policy)
Personal liability supplement
- No coverage for loss assessment.
- Coverage L: Personal liability (just like coverage E in HO policy) min limit= $100,000
- Coverage M: Medical payments to others (works like coverage F in HO policy) min limit= $1000.
Dwelling policy endorsements
- Theft: broad covers property anywhere, limited covers theft from premises.
- automatic increase (raises coverage annually by 4,6 or 8%.
- dwelling under construction
General exclusions
-water back up from sewers or drains
-water and water born materials or pollutants
-off premises power failure (but on property is covered)
-war and nuclear hazard
flood
earthquake, landslide, sinkhole, or any earth movement.
-Neglect and intentional acts
