In a dwelling policy, which of the following other structures would be covered

The dwelling insurance policy provides property coverage for the dwelling and its contents. Many of the coverages found in the dwelling policy are found in the homeowners’ policy, but there are some differences. The dwelling policy tends to provide narrower coverage than the homeowners policy. The insured under the dwelling policy is the named insured and the spouse, if a resident of the same household.  

The DP-03 dwelling policy form is the broadest and provides coverage for the dwelling, other structures, personal property, fair rental value and additional living expenses. In addition to these coverages, the policy provides additional coverages for reasonable repairs, property removed, fire department service charges, debris removal and coverage for trees, shrubs, and other plants. The dwelling forms do not provide coverage for liability, theft, or medical payments. However, such coverages are available through a personal liability supplement endorsement and a theft endorsement.

Dwelling

This amount of insurance applies to the dwelling described in the policy and any attached structures. Building equipment and outdoor equipment used for servicing of the building and located on the described premises is also covered.

Other Structures

This coverage applies to detached structures such as a garage or storage shed. The limit of insurance coverage is set at 10% of the dwelling limit for loss to other structures.

Personal Property

This coverage applies to personal property that is usual to the occupancy of a dwelling. The coverage applies to personal property owned or used by the insured or resident family members, while the property is on the described location. The limit of insurance for this coverage is chosen by the insured.

Fair Rental Value

Under the broad and special dwellings forms, coverage is provided for fair rental coverage for that part of the residence premises that is rented or held for rental to others. If a loss occurs under coverage A that makes that part of the premises unsuitable for living, this coverage would pay the lost rental value. The limit of insurance is 10% of the dwelling limit. Fair rental value is the amount of rent that could reasonably be charged for the premise.

Additional Living Expense

Under the broad and special dwellings forms, coverage is provided for additional living expenses in the event of a loss under Coverage A. If the insured was to temporarily lose use of the dwelling, this coverage would apply and payment could be made for expenses incurred to live elsewhere following a loss that makes the dwelling unsuitable for living.

Deductible

The dwelling policy has a standard deductible of $250.

Optional Coverages:
Personal Liability Supplement

Liability coverage is not automatically included in dwelling policies; however, coverage is available by adding a personal liability supplement to the policy. Liability coverage can be added for a residence premise as long as the insured resides in at least one of the family units; the residence premise can be a three or four family dwelling. The limit of liability is $100,000 per occurrence. Coverage is provided for bodily injury and property damage. Medical payments coverage is also included in the liability supplement. The limit for medical payments is $1,000 per person. The coverage will pay the necessary medical expenses for bodily injury of others when caused by action of the insured.

Residential Theft Coverage

Theft coverage is not automatically included in dwelling policies; however, coverage may be added with a broad theft coverage endorsement or a limited coverage endorsement. The limited theft coverage endorsement is available for dwellings that are not owner-occupied. The broad theft endorsement is only available to owner-occupied dwellings, and can apply to on and off premise theft. Both endorsements provide coverage for theft, attempted theft, and vandalism or malicious mischief as a result of theft. Special limits apply to certain personal property, and certain property is excluded on both endorsements.

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:

• Vacation homes
• Vacant homes
• Seasonal homes
• Secondary homes
• Rental properties
• Older homes

Dwelling Fire Insurance Basics

The 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 Form

The basic form is a “named perils” policy. The policy explicitly names what perils are covered and typically covers losses due to:

• Fire
• Lightning
• Internal explosion

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 Form

The 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:

• Vandalism and malicious mischief
• Windstorm or Hail
• Fire or Lightning
• Explosion
• Riot or Civil Commotion
• Aircraft
• Vehicles
• Smoke
• Burglary damage
• Weight of ice and snow
• 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
• Sudden And Accidental Damage From Artificially Generated Electrical Current
• Volcanic Eruption
• Sudden and accidental tearing apart, cracking, burning, bulging

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 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 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:

• Neglect
• Intentional loss
• Mold, rust, rot
• Constant or repeated leakage or seepage of water or steam
• Earth movement, such as earthquakes
• Wear and tear; deterioration
• Birds, rodents, insects or domestic animals
• Etc.

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.

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