2.04 Other Property and Liability Insurance
Dwelling Policies (ISO)
Dwelling insurance is offered in three ISO forms designed for insured dwellings that are not owner-occupied, unlike a standard homeowners policy. These policies are crucial for landlords, owners of vacation homes, or vacant properties.
Dwelling Property 1 (DP-1) - The Basic Form
Provides basic named perils coverage, typically including fire, lightning, and internal explosion.
Extended Coverage (EC) perils can be added by endorsement, often including windstorm, hail, aircraft damage, riot or civil commotion, vehicle damage, volcanic eruption, explosion (other than internal), and smoke.
Vandalism and Malicious Mischief (VMM) can also be added by endorsement.
Pays losses on an Actual Cash Value (ACV) basis for both the dwelling and personal property, meaning depreciation is deducted from the replacement cost.
Dwelling Property 2 (DP-2) - The Broad Form
Expands beyond DP-1 by covering all DP-1 perils plus EC and VMM.
Adds several additional named perils, such as: bursting of pipes, falling objects, weight of ice/snow/sleet, accidental discharge of water/steam, collapse caused by specified perils, freezing of plumbing, and sudden and accidental tearing apart/cracking/burning/bulging of a hot water system.
Pays losses on a Replacement Cost (RC) basis for the dwelling and other structures, while personal property is still covered at ACV.
Dwelling Property 3 (DP-3) - The Special Form
Provides the broadest coverage for the dwelling and other structures on an open-perils (all-risk) basis, meaning anything not specifically excluded is covered. Common exclusions include flood, earthquake, war, nuclear hazards, and wear and tear.
Personal property coverage remains on a named perils basis, identical to DP-2.
Pays losses on an RC basis for the dwelling and other structures, and ACV for personal property.
A key distinction is that if a home is rented, a standard homeowners policy (like an HO-3) does not apply; instead, a separate Dwelling Policy is required. Theft and liability coverage can be added to these dwelling forms as endorsements to extend protection.
Other Property
Beyond standard dwellings, several other property-related coverages exist for specialized assets.
Mobile Home Insurance
Can be obtained by adding an endorsement to an HO-2 or HO-3 policy or by purchasing a specific standalone mobile home policy (e.g., MH-00-03).
Provides comprehensive coverage for the mobile home, personal property, other structures (like carports or sheds), loss of use, liability, and medical payments.
Perils covered are often similar to a broad form (DP-2) or special form (DP-3) dwelling policy.
Watercraft Insurance
Boatowners Policy: Designed for smaller vessels, typically under feet in length. Provides physical damage coverage (often on an all-risk basis) for the boat, motor, and trailer. It also includes liability for bodily injury and property damage, medical expense coverage for occupants, and uninsured boaters coverage. This policy is suitable for personal watercraft, fishing boats, and smaller sailboats.
Yacht Insurance: Tailored for larger and more complex vessels, generally over feet. Coverage is typically broader, providing for property damage (hull and machinery), liability (protection & indemnity – P&I), medical payments, and uninsured boaters coverage. Yacht policies often include specialized coverages for navigation territories, tender coverage, and sometimes crew liability. They typically require an appraisal and offer higher limits to reflect the greater value and potential liabilities associated with larger vessels.
These policies address watercraft-specific risks that standard homeowners or condo policies typically exclude or provide very limited coverage for.
Inland Marine
Inland Marine coverage is specifically designed for property that is inherently mobile, moved from one location to another, or is unusually valuable, and thus requires broader protection than standard property policies. It is a broad category of property insurance that developed from ocean marine insurance.
Purpose: To cover property that is transported over land, property stored at different locations, instrumentalities of transportation and communication (e.g., bridges, tunnels), and certain personal property floaters.
Inland Marine Floaters: These policies cover items such as jewelry, furs, cameras, musical instruments, fine arts, silverware, and stamp and coin collections. They are often written on an **
Dwelling Policies (ISO)
Dwelling insurance is offered in three ISO forms designed for insured dwellings that are not owner-occupied, unlike a standard homeowners policy. These policies are crucial for landlords, owners of vacation homes, or vacant properties.
Dwelling Property 1 (DP-1) - The Basic Form
Provides basic named perils coverage, typically including fire, lightning, and internal explosion.
Extended Coverage (EC) perils can be added by endorsement, often including windstorm, hail, aircraft damage, riot or civil commotion, vehicle damage, volcanic eruption, explosion (other than internal), and smoke.
Vandalism and Malicious Mischief (VMM) can also be added by endorsement.
Pays losses on an Actual Cash Value (ACV) basis for both the dwelling and personal property, meaning depreciation is deducted from the replacement cost.
Dwelling Property 2 (DP-2) - The Broad Form
Expands beyond DP-1 by covering all DP-1 perils plus EC and VMM.
Adds several additional named perils, such as: bursting of pipes, falling objects, weight of ice/snow/sleet, accidental discharge of water/steam, collapse caused by specified perils, freezing of plumbing, and sudden and accidental tearing apart/cracking/burning/bulging of a hot water system.
Pays losses on a Replacement Cost (RC) basis for the dwelling and other structures, while personal property is still covered at ACV.
Dwelling Property 3 (DP-3) - The Special Form
Provides the broadest coverage for the dwelling and other structures on an open-perils (all-risk) basis, meaning anything not specifically excluded is covered. Common exclusions include flood, earthquake, war, nuclear hazards, and wear and tear.
Personal property coverage remains on a named perils basis, identical to DP-2.
Pays losses on an RC basis for the dwelling and other structures, and ACV for personal property.
A key distinction is that if a home is rented, a standard homeowners policy (like an HO-3) does not apply; instead, a separate Dwelling Policy is required. Theft and liability coverage can be added to these dwelling forms as endorsements to extend protection.
Other Property
Beyond standard dwellings, several other property-related coverages exist for specialized assets.
Mobile Home Insurance
Can be obtained by adding an endorsement to an HO-2 or HO-3 policy or by purchasing a specific standalone mobile home policy (e.g., MH-00-03).
Provides comprehensive coverage for the mobile home, personal property, other structures (like carports or sheds), loss of use, liability, and medical payments.
Perils covered are often similar to a broad form (DP-2) or special form (DP-3) dwelling policy.
Watercraft Insurance
Boatowners Policy: Designed for smaller vessels, typically under feet in length. Provides physical damage coverage (often on an all-risk basis) for the boat, motor, and trailer. It also includes liability for bodily injury and property damage, medical expense coverage for occupants, and uninsured boaters coverage. This policy is suitable for personal watercraft, fishing boats, and smaller sailboats.
Yacht Insurance: Tailored for larger and more complex vessels, generally over feet. Coverage is typically broader, providing for property damage (hull and machinery), liability (protection & indemnity – P&I), medical payments, and uninsured boaters coverage. Yacht policies often include specialized coverages for navigation territories, tender coverage, and sometimes crew liability. They typically require an appraisal and offer higher limits to reflect the greater value and potential liabilities associated with larger vessels.
These policies address watercraft-specific risks that standard homeowners or condo policies typically exclude or provide very limited coverage for.
Inland Marine
Inland Marine coverage is specifically designed for property that is inherently mobile, moved from one location to another, or is unusually valuable, and thus requires broader protection than standard property policies. It is a broad category of property insurance that developed from ocean marine insurance.
Purpose: To cover property that is transported over land, property stored at different locations, instrumentalities of transportation and communication (e.g., bridges, tunnels), and certain personal property floaters.
Inland Marine Floaters: These policies cover items such as jewelry, furs, cameras, musical instruments, fine arts, silverware, and stamp and coin collections. They are often written on an open-perils (all-risk) basis, offering broad coverage for loss or damage, including while in transit or at various unlisted locations.
Key Features:
Worldwide Coverage: Often covers items anywhere in the world, subject to specific exclusions.
Appraisal Requirements: High-value items typically require a professional appraisal to determine the sum insured.
Scheduled vs. Blanket Coverage: Items can be scheduled individually with specific values or covered on a blanket basis up to a total limit.
Deductibles: Policies may have deductibles, which can vary.
Exclusions: Common exclusions include wear and tear, inherent vice, insect or vermin damage, and nuclear hazard.
Personal Umbrella Policy
A Personal Umbrella Policy provides additional liability coverage beyond the limits of standard homeowners, auto, and watercraft policies. It serves as an extra layer of protection against significant liability claims, offering coverage for:
Broad Coverage: Extends liability protection for claims involving bodily injury, property damage, and personal injury (e.g., libel, slander, false arrest).
High Limits: Typically offers coverage limits ranging from to or more.
Excess Coverage: Kicks in after the underlying primary policies (e.g., home, auto) have exhausted their limits.
Broader Scope: Can cover certain liability situations not covered by underlying policies, subject to a self-insured retention (deductible).
Importance: Crucial for individuals with significant assets who want to protect themselves from large judgments that could exceed the limits of their primary insurance policies.