REVIEW NOTES: DWELLING PROPERTY (DP) INSURANCE POLICIES

Dwelling Property Policy

An insurance policy specifically designed for owners of residential buildings who do not occupy them regularly or rent to others.

Basic Form (DP-01)

Offers limited coverage for a narrow range of named perils including fire, lightning, and internal explosions.

Broad Form (DP-02)

Offers broader coverage than the Basic Form, adding additional perils and providing replacement cost for dwelling and other structures.

The Special Form (DP-03)

Provides open-peril coverage on the dwelling and broad, named-peril coverage for personal property.

Coverage A

Provides coverage for the dwelling, including structures attached to it, but excluding the land it sits on.

Coverage B

Covers other structures that are separate from the dwelling, with a limit typically set at 10% of Coverage A.

Coverage C

Covers personal property owned by the insured or their family, with worldwide coverage for 10% of the limit.

Coverage D

Provides coverage for fair rental value lost when the property cannot be rented due to damage from a covered peril.

Coverage E

Covers necessary increases in living expenses incurred by the insured when their property is damaged.

Actual Cash Value (ACV)

The basis for loss settlements under some coverages, accounting for depreciation of property.

Replacement Cost

The basis for loss settlements that pays the cost to replace damaged property without depreciation.

Eligibility Criteria

Guidelines determining qualification for DP policies, including occupancy status and property valuation.

Extended Coverage Perils

Additional perils that can be purchased under the Basic Form, such as riot, explosion, and vehicles.

Improvements, Alterations, and Additions Coverage

Coverage that allows tenants to insure improvements made at their expense, limited to 10% of Coverage C.

General Exclusions

Certain scenarios or risks that are not covered by the DP policies, such as ordinance or law and water damage.

Personal Liability Coverage

A supplement providing coverage for personal activities that cause bodily injury or property damage to others.

Cancellation Terms

Guidelines limiting insurer cancellation rights after the underwriting period, usually allowing cancellation for premium non-payment or misrepresentation.

Nonrenewal Notification

Required advance notice by the insurer to the insured if a policy will not be renewed, typically at least 30 days prior to expiration.