DP-1: Basic Form
The basic form is a “named perils” policy (that is, the policy explicitly names what perils are covered) and covers losses due to:
- Internal explosion, such as a stove or water heater
There are two optional endorsements available with DP-1 coverage:
- Vandalism or malicious mischief (V&MM)
- Extended coverage, which includes damages due to the following:
- Hail or windstorms
- Other explosions
- Riot/civil commotion
- Aircraft or vehicles
- Volcanic eruptions
The DP-1 form is usually the form of choice for vacant homes or properties, and it may be the only option for these dwellings.
DP-2: Broad Form
The broad form is also a named perils policy and covers the same perils as the basic form, with certain additions:
- Extended coverage and V&MM coverage are automatically included
- Burglary damage
- Weight of ice and snow
- Glass breakage (as long as the building was not vacant for 60 or more days before a loss)
- Accidental discharge or overflow of water or steam (as long as the building was not vacant for 60 days before a loss)
- Falling objects (such as trees)
- Freezing of pipes
- Electrical damage
- Collapse (due to decay, vermin or insect damage, or other perils)
- Tearing apart, cracking, burning, bulging
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 damage caused by a named peril, this coverage would reimburse the landlord for rent lost during the process.
DP-3: Special Form
The 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 those 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 include some or all of the following:
- Water damage
- Laws and ordinances
- Intentional loss
- Mold, rust, rot and other gradual losses
- Certain types of water damage
- Earth movement, such as earthquakes
- Governmental action
Which Form is Right For You?
All three dwelling fire insurance policy forms can be valuable, depending on what kind of property is being insured.
DP-1 coverage is ideal for vacant buildings, as the other two policies will not cover such structures. It only offers the very basic coverage to a landlord.
Whether you choose a DP-2 or DP-3 policy depends on several things—cost, perils covered and ACV versus RCV—but a cost-benefit analysis should always be conducted before purchasing a dwelling fire policy. We can help you do just that—contact us at The Brignac Group to learn more about what type of dwelling fire policy is right for you. At The Brignac Group, we are the final piece to your dwelling fire insurance puzzle.