Dwelling Policy – 1: Basic Form

        Dwelling Fire Coverage Options


The basic form is a “named perils” policy (that is, the policy explicitly names what perils are covered) and covers losses due to:

     • Fire

     • Lightning

     • 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:

               o Hail or windstorms

               o Other explosions

               o Riot/civil commotion

               o Aircraft or vehicles

               o Smoke

               o Volcanic eruptions

Claims under a DP-1 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.

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.

If you own rental or investment properties, you need to protect them from a host of potential perils, including fire, lightning, vandalism and theft. If your primary residence is located on the rental or investment property, a homeowners policy would cover you from many of the potential risks. But what if you live somewhere else? A dwelling fire policy may be the type of coverage you need to insure your rental or investment property from damages.

Just like homeowners policies, there are several different types of dwelling fire coverage. 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.