Dwelling policies are often used for rental houses, though an owner can also live in the insured dwelling. There are three forms: Basic (DP-1), Broad (DP-2) and Special (DP-3).
Coverages included:
- DP-1 has four coverage parts: A dwelling, B other structures, C personal property and D fair rental value.
- DP-2 and DP-3 add Coverage E, additional living expense.
All three have fair rental value. A DP-1 insured who wants additional living expense must add it by endorsement.
Other structures extension of up to 10% of Coverage A: in the DP-1 it is carved out of Coverage A, so money used for a garage is not available for the house in the same loss. In the DP-2 and DP-3 it is additional insurance.
Perils:
DP-1 automatically covers fire, lightning and internal explosion. Extended coverage adds windstorm or hail, explosion, riot or civil commotion, aircraft, vehicles, smoke and volcanic eruption, and vandalism or malicious mischief can be added for a premium.
DP-2 covers a broader list of named perils, including accidental discharge of water from plumbing.
DP-3 covers the dwelling and other structures on an open perils basis, while personal property stays on named perils.