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dwelling fire policy Dwelling Fire Policy For some clients, a dwelling fire policy is the the proper alternative to a homeowners policy. Don’t be mislead, dwelling fire insurance covers much more than just fire. But this kind of policy isn’t for everyone, so here are the dwelling fire basics. A dwelling fire policy may be beneficial for
Dwelling Fire Insurance BasicsThe coverage is very similar to a homeowners policy, with one significant difference – a dwelling fire policy is created for someone that does not make the property their primary residence. If you need to insure a rental or investment property, a dwelling fire policy is a smart decision. Differentiating the Dwelling Policy TypesJust like homeowners insurance, there are several different types of dwelling fire policies. DP-1 is known as the basic form, DP-2 is known as the broad form and DP-3 is known as the special form. Each offers a significantly different level of coverage. DP-1: Basic FormThe basic form is a “named perils” policy (that is, the policy explicitly names what perils are covered) and covers losses due to:
There are two optional endorsements available with DP-1 coverage:
Claims under a DP-1 dwelling fire policy are settled on an actual cash value (ACV) basis by default—however, you can sometimes opt for a replacement cost value (RCV) policy for an additional cost. This form is usually the choice (and possibly only option) for vacant homes or properties. DP-2: Broad FormThe dwelling fire policy broad form is also a “named perils” policy and covers the same perils as the basic form, with the following additions included:
Unlike the DP-1 form, the DP-2 form settles claims on a replacement cost basis. Loss of rent coverage may be included with a DP-2 policy. If tenants are forced to move out while the landlord repairs the dwelling due to a covered loss, this coverage would reimburse the landlord for rent lost during the process. DP-3: Special FormThe DP-3 form is the most comprehensive dwelling fire coverage available. It is an “open perils” or “all risk” policy, which means real property (dwelling and other structures) will be covered for all types of damage, exceptthose exclusions named in the policy. However, damaged personal property (all the items inside the dwelling and other structures) is covered on a “named perils” basis. DP-3 form exclusions vary, but will typically be some or all of the following:
For some consumers, a dwelling fire policy is a proper alternative to a homeowners policy. Despite its name, dwelling insurance policies can cover much more than just fire. But this kind of policy isn’t for everyone, so here are the dwelling fire basics. A dwelling fire policy may be beneficial for:
Dwelling Fire Insurance BasicsThe coverage is very similar to a homeowners policy, with one significant difference – a dwelling fire policy is typically used for someone that does not make the property their primary residence. Dwelling policies typically do not provide liability coverage, like some homeowners policy forms, but they can provide other similar coverages to standard homeowners policies. Just like homeowners insurance, there are several different types of dwelling fire policies. DP-1 is known as the basic form, DP-2 is known as the broad form and DP-3 is known as the special form. Each provides a significantly different level of coverage. DP-1: Basic FormThe basic form is a “named perils” policy. The policy explicitly names what perils are covered and typically covers losses due to:
A DP-1 can also provide coverage for your other structures on the property, personal property usual to the occupancy dwelling, fair rental value, debris removal, and improvements, alterations and additions. When a Premium for Extended Coverage is shown in the Declarations, perils such as Windstorm or Hail, Explosion, Riot or Civil Commotion, Aircraft, Vehicles, Smoke, and Volcanic Eruption can also be included (subject to exclusions). You also may be able to include Vandalism or Malicious Mischief. Talk to your agent about including these coverages. Claims under a DP-1 dwelling fire policy are settled on an actual cash value (ACV) basis—however, you may be able to opt for a replacement cost value (RCV) policy for an additional cost. Speak with your agent about replacement cost options. DP-2: Broad FormThe dwelling fire policy broad form is also a “named perils” policy and covers the same perils as the basic form, with additional coverages such as:
Unlike the DP-1 form, the DP-2 form typically settles claims on a replacement cost basis. Loss of rent coverage, additional living expenses, collapse, debris removal, and improvements, alterations and additions may also be included with a DP-2 policy. DP-3: Special FormThe DP-3 form is the most comprehensive dwelling fire coverage available. It is an “open perils” or “all risk” policy, which means real property (dwelling and other structures) will be covered for all types of damage, except exclusions named in the policy. However, damaged personal property (all the items inside the dwelling and other structures) is covered on a “named perils” basis. DP-3 form exclusions may vary, but will typically be some or all of the following:
This is not a complete list of policy exclusions. It is important to review your Dwelling policy to understand exactly what your policy will and will not cover. There also may be optional Endorsements available, to include other specific coverages. If you have questions about Dwelling policies, talk with your insurance agent or insurance company. You may also contact the North Carolina Department of Insurance, Consumer Services Division at: 1-855-408-1212. What is covered under a DP2 policy?What Does a DP2 Policy Cover? A DP2 policy covers damage to the primary structure as well as other structures on the property, such as sheds, fences, detached garages, and patio coverings.
What is covered under the dwelling broad form?The broad form covers direct damage to dwellings and personal property on a broad named perils basis. The special form covers direct damage to dwellings and appurtenant structures on an all risks basis while covering personal property on a broad named peril basis.
Which of the following perils would be covered under a dwelling policy?Most homeowners insurance policies cover the following perils under dwelling coverage: Theft. Vandalism. Fire and smoke damage.
What is not covered under the dwelling broad form DP 2?It's a broad form insurance policy that covers more perils than the basic DP-1 policy, but less than the more robust DP-3 insurance policy. DP-2 coverage offers dwelling coverage on a replacement cost basis and does not account for depreciation.
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Which of the following perils is covered under the dwelling property 2 (broad form) policy?
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