-Dwelling insurance shouldn't be confused w/ homeowners policies. Dwelling insurance doesn't require the risk to be owner occupied nor do the policies automatically contain the peril of theft & or personal liability coverages.

-usually used to cover risks that may not qualify for the homeowner policy.

a. single family homes

b. 1-4 family homes

c. duplexes, triplexes

d. maximum 5 roomers or boarders

e. dwellings under construction

f. permanently installed mobile homes

g. only incidental business risk

**farm dwellings/ property are not eligible for the dwelling program**

a. DP-1 Basic form

b. DP-2 Broad form

c. DP-3 Special Form

Dwelling Property Forms

1.) DP-1 Basic Form

-Covers dwelling, other structures, & personal property

-Covers: fire, lightning, internal explosion

Optional coverage for DP-1 ONLY:windstorm, civil commotion, smoke, hail, aircraft, vehicles, volcanic eruption, explosion, riot (WC SHAVVER), vandalism & malicious mischief an endorsement

Dwelling Property Forms

2.) DP-2 Broad form

-covers dwellings, other structures, & personal property

-Covers: automatically includes DP-1 perils, EC perils, & VMM, plus the broad perils

Dwelling Property Forms

3.) DP-3 Special Forms

-open perils for dwelling & other structures

-Provides broad form perils for personal property

Extended Coverage (EC): windstorm, civil commotion, smoke, hail, aircraft, vehicles, volcanic eruption, explosion, riot (WC SHAVVER)

Broad Perils: Burglary damage, ice & snow weight, glass breakage, accidental discharge or overflow of water or stream, falling objects, freezing of pipes, electrical damage, collapse, tearing apart, cracking, burning, or bulging (BIG AFFECT)

Dwelling Property forms

1.) DP-1 Basic Form

**DP-1 allows an insured to add extended coverage (EC) and the vanadlism peril to the policy**

Provides coverage for direct physial loss caused by:

1.) fire: rapid ocidation, accompianed by a flame, spark, or glow. Must be sudden & unexpected not long-term. Fire must be hostile not friendly.

2.) Lightning: electricity atomospherically produce by nature. not an artificial current.

3.) Internal Explosion: explosion that occurs in a covered building on in a building containing covered personal property. Usually covers explosions of a furance, stove, or hot water heater. Excludes: bursting of water pipes, electrical arcing, explosions of steam boilers, rupture or bursting of pressure relief devices

Dwelling Property forms

2.) DP-2 Broad Form

A.) Coverage for direct physical loss caused by fire or lightning

B.) DP-2 automatically includes the following EC perils and V&MM:

a. Riot: refers to assemblage of 3 or more people that results in the use of force or violence against indiv. or property

b. Civil commotion: cover damage to insured property caused by an uprising or distrubance of a large # of people

c. Explosion: does not exclude steam boilers or steam pipes and explosion doesn't have to occur in dwelling

Dwelling Property forms

2.) DP-2 Broad Form continued

d. Vehicles: only excludes damages to fences, driveways, walkways when caused by a veh. owner or operated by an insured or residen doesn't exclude when caused by nonresident

e. Smoke: covers sudden & accidental damage to covered propety except smoke from agriculture smudging and industrial operation. Covers puffback, release of soot, smoke, vapor, or furms from furnance, boiler,

f. aircraft: covers damage to insured property from contact w/ an aircraft, including contact w/ objects falling from the aircraft.

Dwelling Property forms

2.) DP-2 Broad Form continued

g. Hail: covers damage caused by direct action of hail to insured property. Must be damage to the outside of the insured dwelling allowing hail to enter in order for intertior damage to be covered

h. Windstorm: includes high winds, cyclone, tornadoes, & hurricanes. Interior damage covered only if wind first makes an opening in structure. Excluded property: awnings, signs, antennas, rowboats, canoes

i. Volcanic Eruption: covers damage caused by eruption of volcano, lava flow, & airborne particles. Excludes: earthquake, land shock waves, or land tremors

Dwelling Property forms

2.) DP-2 Broad Form

DP-2 also provides coverage for the following 9 perils

a. Burglary damage- provides protection for property damage by burglars

b. Weight of ice, snow, or sleet- covers damage to the insured building and/or contents due to the weight of ice, snow or sleet excluding loss to the following property:

-awnings, fences, patios, pavements, pools, foundations, retaining walls, bulkheads, wharfs, docks, piers

Dwelling Property forms

2.) DP-2 Broad Form continued

d. Glass breakage: provides coverage for all building glass, including windows & doors, damaged by a covered peril as long as the insured premises has not been vacant for 60 or more days.

e. Accidental discharge: covers accidental discharge of water or stream from a plumbing, heating, or AC, from a fire protective sprinkler system, or from within a household appliance. Doesn't cover: loss to a building caused by constant or repeated seepage and no coverage if dwelling has been vacant for more than 60 days

Dwelling Property forms

2.) DP-2 Broad Form continued

f. falling objects: provides coverage for exterior premises. Excludes coverage for the following: outdoor radio & tv antennas, outdoor equipment, awnings, fences, damage to the falling object itself

g. Freezing: provides coverage for freezing of plumbing, heating, AC, automatic fire sprinkler system, household applicance. If property is vacant or unoccupied & insured has used reasonable care to be sure: heat has been maintained in the building or water supply has been shut off & system drained.

Dwelling Property forms

2.) DP-2 Broad Form continued

h. Electrical Damage: provides sudden & accidental damage from artificially generated electrical current includes appliances, fixtures, computers, home entertainment units but doesn't cover: tubes, transistors, similar electrical components

i: Sudden & accidental tearing apart, cracking, burning, or bulging: provides coverage for sudden & accidental tearing apart, cracking, burning, or bulging of steam or hot water heating systems, AC, automatic fire protective sprinker systems or appliances for heating water.

Dwelling Property forms

2.) DP-2 Broad Form continued

j. Collapse: covers physical loss to covered property involving abrupt falling down or caving in of a building or any part of it caused by: perils insured against in the policy, hidden decay, hidden vermin or insect damage, weight of contents, weight of rain collected on roof.

Doesn't cover: settling, crackling, shrinking, bulging, expansion of a building, awnings/fences, patios, pools, underground pipes flues drains, foundations, retaining walls & dock

Dwelling Property forms

3.) DP-3 Special form

Provides coverage for:

a. open perils coverage on the real proerty (dwelling or other structures)

b. Named perils coverage on the personal property contents.

Dwelling Property forms

3.) DP-3 Special form continued

*Refer to ch. 3 pg 11 for full list*

-Open perils covers all property direct loss except the following exlcusions:

a. loss excluded by general exclusions

b. gradual & expected loss such as wear and tear, smog, mechanical breakdown

c. settling, cracking, shrinking, bulging etc.

d. loss caused by birds, vermin, rodents, insects, domestic animals

e. wind, hail, snow, sleet damage to antennas, laws, plants, shrubs, trees

Coverages of the Dwelling form

Direct Loss Coverages

Coverage A- Dwelling Building: coverage provided on the dwelling as described in the dec. section as well as any structure attached to this dwelling (garage). Insured sets amoutn of coverage based on replacement cost of house (DP-1 however pays all losses on ACV basis). Coverage on dwelling also includes:

- materials/ supplies located on or next to location used to construct, alter, or repair dwelling

-building equipment & outdoor equipment

Coverages of the Dwelling form

Direct Loss Coverages

**in 2002, coveraged now applies to commercial, manufacturing, or farming property that is owned by insured or tenant**

Coverage B- Other Structures: 10% of coverage A amount which is an additional amount of insurance under DP-2 & DP-3 however under DP-1 it is an included in the dwelling limit. Coverage pertains to structures detached from main dwelling such as:

-detached garages

-any other outbuilding on the premises that is used for incidental purposes

DOESN'T COVER:

- structures used for business purposes

-rented or held for rental to any person who is not a tenant of the dwelling

Coverages of the Dwelling form

Direct Loss Coverages

3.) Coverage C- Personal Property: in order to have coverage for insured's personal property, limit must be shown on dec page and premium paid. Insured sets limit based on ACV of property.

-Only gives coverage to PP at the insured location owned by insured or family members who reside in dwelling. Guests & servants can be covered if insured desires.

-Provides 10% of Coverage C for PP OFF premises but exlcudes propert of guest/servants and rowboats/canoes.

Coverages of the Dwelling form

Direct Loss Coverages

Exlcusions for Coverage C

-accounts, bank notes, bills, bullion, coins, currency, deeds, evidence of debt, letters of credit, manuscripts, medals, money, notes other than bank notes, passports, personal records, platinum, securities, silver other than silverware, tickets/stamps.

-animals, birds, fish

-aircraft & motor veh.

-boats (other than rowboats/canones)

-date

-credit cards of fund transfer cards

Coverages of the Dwelling form

Indirect Loss coverages

Coverages of the Dwelling form

Indirect Loss coverages

Coverage D Fair Rental Value: rental value minus expenses that do not continue (such as heat & electricity) while the property is unfit for use.

-Payment will be for shortest tiem requird to repaid or replace damaged part

-if civil authority will not allow insured to use covered property due to direct damage to neighboring location rental for 2 weeks.

-Coverage: 20% of coverage A. Not additional cost under DP-1 additional amount for DP-2 & DP-3

Coverages of the Dwelling form

Indirect Loss coverages

Coverage E Additional Living Expense: will pay additional living expenses incurred by the insured while the property is unfit for use. Means any necessary increase in living expense (rent for alt housing, meals out, laundry) incurred so that household can maintain its normal standard of livign.

DP-1 doesn't automatically cover this.

Additional Coverages of the Dwelling Policy

additional coverages that are included in all forms of the dwelling policy except as noted:

a. Reasonable repairs: insurer will pay reasonable cost incurre by the insured for necessary measures to protect against further damage.

b. Debirs Removal: insurer will pay the insured's reasonable expense for the removal of: debris of covered property if a peril insured against cause the loss or ash, dush, or particles from volcanic eruption

Additional Coverages of the Dwelling Policy

additional coverages that are included in all forms of the dwelling policy except as noted:

c. Improvements, alterations, & additions: if insured is a tenant of the described location, they may use up to 10% of coverage C limit of liability for loss by a peril insured against to improvements, alterations,

d. Fire department service charge: policy will provide $500 to pay for fire department charges incurred when the fire department is called to save or protect covered property from a peril insured against

Additional Coverages of the Dwelling Policy

additional coverages that are included in all forms of the dwelling policy except as noted:

e. World-wide coverage: insured may use up to 10% of coverage C limit of liability for loss by a peril insured against to property covered under C (except rowboats & canoes) while anywhere in the world. Use of this coverage doesn't reduce coverage C

f. Trees, shrubs, and other plants- policy covers tree, shrubs, plants, or lawns, on the covered premise if the loss is caused by the following perils:

-fire, lightning, explosion, riot, civil comotion

-aircraft, veh not owned or operator by insured, vandalism or malicious mischief.

limit for coverage will not be more than 5% of coverage A or more than $500 for any 1 tree, shrub, or plant. This coverage is additional insurance

Additional Coverages of the Dwelling Policy

additional coverages that are included in all forms of the dwelling policy except as noted:

g. Proerty Removed: form covers personal proerty against dirct loss from any cause while being removed from the premises endangered by a peril insured against for no more than 30 days while removed (5 days under DP-1)

h. Ordinance or law (DP-2 DP-3 ONLY): for an insured who owns an insured location, up to 10% of the coverage A limit may be used to cover increase costs of repair/rebuilding after a covered loss occurs due to the enforcement of any ordiance or loaw regulating construction, demolition, remodeling. this is an additional insurance.

1.) War

2.) Nuclear Hazard

3.) Water Damage- includes the following:

-flood, surface water, waves, tidal waves, & overflow of streams

-water backed up from sewers of drains

-water below the surface of the ground including seepage of leaks through sidewalks, walls, basements, floors of windows

4.) Earth movements- which means: earthquakes, land shock, waves, 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 caused by or resulting from human or animal forces

5.) Power failure: the failure of power or other utility service if the failure takes place off the described premises

6.) Neglect: insureds unwillingness to use all reasonable means available to save property at and after the time of loss

7.) Intentional loss: any loss arising out of any act committed:

-by or at the direction of the named insured

-with the intent to cause a loss

1.) Policy period: all covered losses must occur during policy period. Policy ends/begins at noon

2.) Mortgage clause: if mortgagee is named in dwelling policy any loss payable under coverage A or B will be paid to the mortgagee and the named insured.

**if insurer denies insured's claim, denial will not apply to a valid claim of the mortgagee if mortgagee: notifies insurer of any change in ownership, pays any premium due under the policy, submits a signed, sworn proof of loss within 60 days after receiving notice from insurer

3.) Liberalization clause: if insurer makes a change that broadens coverage under an existing policy w/o additional premium charge, that change will automatically apply to an insured's policy as of the date the insurer implements charge. Implementation date must fall within 60 days prior to or during the policy period stated in the declrations

4.) Concealment or fraud- entire policy will be void if, whether before or after a loss, the insured has committed any of the following:

-intentionally concealed or misrepresneted any material fact or circumstance

-engaged in fraudulent conduct

-made false statements

5.) Recovered Property: if insurer or insured covers any property for which the insurer has made payment under the policy, recovering party must notify other party of recovery. At insureds option-property will be returned to or retained by the insured.

6.) Duties after loss: insured must give the insurer prompt notice, protect the property from further loss, keep accurate records when making reasonable repairs, cooperate w/ insurer, show damaged property, and send proof of loss within 60 days

7.) Settlement considerations: All DP policies settle losses to personal property at ACV. Losses to dwellings and other strucutres paid on replacement cost basis (except the DP-1) with no deduction for depreciation as long as insured carries insurance equal to 80% or more of the full replacemetn cost. DP-1 pays for both building & contents losses on an ACV only.

8.) Legal Action against insurer: w/ newer forms time allowed to bring legal action against insurer was increased to 2 years.

9.) Other insurance & service agreement: if there is other insurance covering the property the insurer will only pay its percentage of loss as their limit bears.

10.) Loss payable clause: provides that if a loss payee is listed in the Declarations for insured personal property, the loss payee is considered an insured with respect to that property & will be notified in writing if the insurer cancells or renews the policy.

1.) Automatic increase in insurance: provides an annual increase in the coverage A amount of 4%, 6%, 8%

2.) Broad theft coverage: will provide theft coverage for personal property both on & off the covered premises

3.) Dwelling under construction: when the intended occupant of a dwelling under construction is the named insured, this endorsement is attached to the dwelling policy. Limit of liability that applies at any given time is a %  of the policy limit based on the value of the partially completed home.

4.) Personal Liability coverage: 2 major areas of liability exposure that can be covered under the dwelling form- personal & business

5.) Special provisions- refer to other book