Dwelling Policy (Rental, vacation, or non-owner-occupied homes)

DP-1 (Basic Form)

• Covers named perils only (e.g., fire, vandalism, windstorm).
• Typically provides actual cash value (ACV) coverage (depreciation is considered).
• Limited coverage, making it the least comprehensive.

DP-2 (Broad Form)

• Covers more perils than DP-1 (e.g., falling objects, freezing pipes, burglary damage).
• Provides replacement cost coverage for the dwelling (no depreciation deduction).
• Includes additional coverages like loss of rental income.

DP-3 (Special Form) - Most comprehensive dwelling policy.

• Provides all-risk (open-peril) coverage for the dwelling.
• Covers replacement cost for the dwelling.
• Ideal for landlords as it includes liability and rental income protection.

Deep diving into Dwelling Policy (DP)

DP-1

The DP-1’s Other Coverages section does not increase the limits of insurance stated for each coverage:

• Other Structures coverage up to 10% of Coverage A limit.
• Debris removal.
• Improvements, alterations and additions of the insured as a Renter up to 10% of Coverage C.
• Property away from the premises (worldwide) up to 10% of Coverage C.
• Fair rental value of the property up to 20% of Coverage A.
• Cost for reasonable repairs.
• Five days coverage for removed property at temporary locations when property is removed from a premises endangered by an insured peril.
• Fire Department Service Charge: $500.

The DP-1 policy form insures against the basic perils of:

• Fire & Lightning
• Explosion (explosion in the covered property)
• Catastrophic Ground Collapse (by statute in Florida)

The DP-1 can be endorsed with Extended Coverage (EC) for:

• Windstorm
• Hail
• Explosion (internal and external explosions)
• Riot or civil commotion
• Aircraft & Vehicles
• Smoke (excluding smoke from fireplaces, agricultural smudging or industrial operations)
• Volcanic eruption

Vandalism can also be added to the policy when Fire and EC coverage have been selected. Vandalism or malicious mischief (VMM) excludes:

• damage to building glass.
• crime losses (except building damage caused by burglars).
• coverage for vacancy of 60 or more consecutive days immediately preceding the loss.

DP-1 policy conditions include:

• Loss Settlement at Actual Cash Value (ACV).
• Other Insurance provision where the policy pays on a pro-rata share basis.

DP-2

Broad Form DP-2 includes the DP-1 Perils (Fire, EC and VMM) and adds the following PERILS:

• Damage by Burglars
• Falling Objects
• Weight of Ice, Snow or Sleet
• Accidental Discharge or Overflow of Water or Steam including:
• Steam or Hot Water Heating system – Plumbing – Heating/Air Conditioning – Sprinkler System, or Household Appliance
• Sudden and Accidental Tearing Apart, Cracking, Burning or Bulging including Freezing from within
• Sudden and accidental damage from artificially generated electrical current
• Volcanic eruption

DP-2 includes all of the DP-1 “OTHER COVERAGES” and adds the following:

• Other Structures coverage up to 10% of Coverage A as additional amounts of insurance.
• Improvements, alterations and additions as a Renter up to 10% of Coverage C as additional amounts of insurance.
• Thirty days coverage for removed property at temporary locations when property is removed from a premises endangered by an insured peril.
• Coverages D and E are both covered up to 20% of Coverage A – as additional amounts of insurance no monthly limit as in DP1.
• 5% of Coverage for loss to trees, shrubs and plants with a $500 limit per any one item.
• Collapse.
• Breakage of glass or safety glazing material – 60 day vacancy exclusion applies.
• Building Ordinance or Law 10% of the Coverage A limit if the insured is the building owner – 10% of Coverage B if the insured is a tenant.
• Loss settlement on building structures on a RCV basis.

DP-3

• The Special Form DP-3 covers building structures on an “open peril” basis with all other coverage the same as the Broad Form DP-2.
• Open perils coverage mean that all direct physical loss is covered except for such things that are specifically excluded.

Summary of the Differences

*Special sub‑limits for items like jewelry, firearms, silverware, business property, etc

Coverage A amounts vary per state. In Florida the standard minimum and maximum policy amount are $25,000 and $1Million, although sometimes underwriting allows up to $2 million.

ACV – Actual Cost Value 

RCV – Replacement Cost Value

The Dwelling Program insures:

• One to four-unit family dwellings.
• Mobile Homes not having more than one apartment.
• Dwellings rented to others by the owner.
• Dwellings owned by corporations or other business entities.
• Owner-occupied dwellings not eligible for homeowners insurance.

The Dwelling coverages are:

A – Dwelling
B – Other Structures
C – Personal Property
D – Fair Rental Value
E – Additional Living Expenses

Coverage A – Dwelling covers:

• Specifically listed dwelling including its additions.
• Building and outdoor equipment located on the premises used in the service of the building.
• Building materials on or adjacent to the premises for use in alteration or repair.

Coverage B – Other Structures covers:

• Coverage B covers (this coverage must be selected and is not an automatic percentage of Coverage A)
• Detached structures on the dwelling premises not used for commercial, farming, manufacturing and not rented or held for rental to others (except rented solely for a private garage or rented to a tenant of the main dwelling)
• Examples:
• Fence
• Shed
• Detached Garage
• Mother-in-Law Suite
• Above Ground Pool

Coverage C Personal Property covers:

• personal property usual to a dwelling occupancy.
• personal property.
• in the dwelling OR on the dwelling premises AND
• which belongs to the insured OR insured’s family members OR guests or servants.

Coverage D Fair Rental Value:

• reimburses the insured for the fair rental value (the loss of fair rent) of the insured property. IF
• damaged by a covered peril. AND
• the dwelling is uninhabitable.
• payments compensate for the necessary period of restoration.

Coverage E Additional Living Expenses: 

• Compensates the insured for the additional expenses incurred by the insured for the maintenance of the insured’s normal standard of living. IF
• the insured’s property is damaged by a covered peril and
• the dwelling is uninhabitable
• payments compensate for the necessary period of restoration.
• the coverage is available by endorsement on the DP-1 policy form.

The Dwelling policy’s general exclusions are:

• Loss from enforcement of any law regulating use, construction, demolition or repair of property.
• Earth movement*.
• Power interruption if the damaged power source is at other premises.
• Neglect of the insured to protect property from damage.
• War, Nuclear hazards, Intentional loss.
• Governmental action.
• Water damage from flood, rising waters, backing up of sewers or drains, overflow from a sump, or subsurface water.
• DP-1 excludes outside lawns, trees, shrubs or plants.

Section I excludes loss from earth movement including:

• earthquake, land shock waves or tremors before, during or after a volcanic eruption.
• landslide, mudslide or mudflow.
• subsidence or sinkhole.
• any other earth movement including earth sinking, rising or shifting.

Dwelling Policy - Options

• The Dwelling program offers the following options to alter coverages in the policies:
• Automatic Increase in Insurance: provides an annual percentage increase in Coverages A & B.
• Building Ordinance or Law may be added to the DP-1.
• Building Ordinance or Law may be increased beyond the 10% limit on DP-2 or DP-3.
• Building additions and alterations, and condo association assessments may be added to a condo policy.
• Business personal property may be covered by endorsement.
• Broad Form Theft may be added by endorsement.
• Limited Form Theft may be written for non-owner-occupied dwellings – on-premises only.
• Personal Liability coverage available by endorsement.

Deductibles are required to be listed in dollar amounts even if a percentage hurricane deductible is selected:

• The Standard deductible is $500 for all perils other than hurricane.
• Hurricane deductible: is a minimum of $500 with the option of 2% – 5% – 10% of the stated Dwelling amount.
• The All- Peril deductible applies on a per occurrence basis.
• Hurricane deductibles apply on an annual basis (not per occurrence).