3.2 Dwelling Policy Forms (DP-1, DP-2, DP-3)
Key Takeaways
- DP-1 (Basic Form) provides named perils coverage only — the most limited and least expensive dwelling form
- DP-2 (Broad Form) covers more named perils than DP-1 and includes theft coverage — moderate protection and cost
- DP-3 (Special Form) provides open perils coverage for the dwelling and named perils for personal property — most comprehensive
- As you move from DP-1 to DP-3, coverage expands and premiums increase proportionally
- DP-3 is similar to HO-3 in coverage structure — open perils on building, named perils on contents
Last updated: December 2025
The Insurance Services Office (ISO) developed three standardized dwelling policy forms, each offering different levels of protection. Understanding the differences is heavily tested on the P&C exam.
The Three Dwelling Forms at a Glance
| Form | Name | Dwelling Coverage | Personal Property | Cost | Best For |
|---|---|---|---|---|---|
| DP-1 | Basic Form | Named Perils | Named Perils | Lowest | Vacant, minimal coverage needs |
| DP-2 | Broad Form | Named Perils (more) | Named Perils | Moderate | Rentals, seasonal homes |
| DP-3 | Special Form | Open Perils | Named Perils | Highest | Maximum landlord protection |
DP-1: Basic Form
The Most Limited Coverage
Covered Perils (Named Perils Only)
The DP-1 covers these specific perils:
- Fire or lightning
- Internal explosion
- Windstorm or hail (exterior damage only)
- Explosion
- Riot or civil commotion
- Aircraft
- Vehicles
- Smoke
- Volcanic eruption
Key Limitations
- NO theft coverage — Major gap in protection
- Pays losses on Actual Cash Value (ACV) basis only
- Limited water damage coverage
- No coverage for falling objects, ice/snow/sleet weight
When to Use DP-1
- Vacant properties needing minimal coverage
- Very low-value structures
- Properties requiring only basic fire protection
- Budget-conscious coverage
Exam Tip: DP-1 does NOT cover theft. This is a key distinction from DP-2 and DP-3.
DP-2: Broad Form
Enhanced Named Perils Coverage
Covered Perils (Expanded List)
DP-2 includes all DP-1 perils PLUS:
- Theft — Major addition from DP-1
- Falling objects
- Weight of ice, snow, or sleet
- Accidental discharge of water or steam
- Freezing of plumbing, heating, or AC
- Sudden and accidental damage from electrical current
- Volcanic eruption damage
Key Features
- Broader peril coverage than DP-1
- Theft coverage included
- ACV or Replacement Cost available (with endorsement)
- Good balance of coverage and cost
When to Use DP-2
- Rental properties
- Seasonal/vacation homes
- Secondary residences
- Properties needing theft coverage but not full open perils
DP-3: Special Form
The Most Comprehensive Dwelling Policy
Coverage Structure
| Component | Coverage Type |
|---|---|
| Dwelling (Coverage A) | Open Perils (all risks except excluded) |
| Other Structures (B) | Open Perils |
| Personal Property (C) | Named Perils (same as DP-2) |
| Fair Rental Value (D) | Included |
Key Features
- Open perils on the building — Best protection
- Named perils on contents (similar to HO-3)
- Replacement Cost available
- Most comprehensive landlord protection
Comparison to Homeowners HO-3
| Feature | DP-3 | HO-3 |
|---|---|---|
| Dwelling coverage | Open perils | Open perils |
| Contents coverage | Named perils | Named perils |
| Liability | NOT included | Included |
| Medical payments | NOT included | Included |
| Target market | Landlords, non-occupants | Owner-occupants |
When to Use DP-3
- Investment rental properties
- Landlords wanting maximum protection
- Higher-value properties
- When open perils coverage is essential
Named Perils Comparison
| Peril | DP-1 | DP-2 | DP-3 |
|---|---|---|---|
| Fire and lightning | ✅ | ✅ | ✅ (open) |
| Windstorm and hail | ✅ | ✅ | ✅ (open) |
| Explosion | ✅ | ✅ | ✅ (open) |
| Riot | ✅ | ✅ | ✅ (open) |
| Aircraft | ✅ | ✅ | ✅ (open) |
| Vehicles | ✅ | ✅ | ✅ (open) |
| Smoke | ✅ | ✅ | ✅ (open) |
| Theft | ❌ | ✅ | ✅ (open) |
| Falling objects | ❌ | ✅ | ✅ (open) |
| Ice/snow weight | ❌ | ✅ | ✅ (open) |
| Water damage (accidental) | ❌ | ✅ | ✅ (open) |
| Freezing of systems | ❌ | ✅ | ✅ (open) |
| Electrical damage | ❌ | ✅ | ✅ (open) |
Premium Comparison
Approximate relative costs for the same property:
| Form | Relative Premium | Coverage Level |
|---|---|---|
| DP-1 | 100% (baseline) | Basic |
| DP-2 | 115-130% | Moderate |
| DP-3 | 140-160% | Comprehensive |
Exam Tips
- DP-1 does NOT cover theft — Most frequently tested difference
- DP-3 = Open perils on building, Named perils on contents
- None of the DP forms include liability — That requires an endorsement or separate policy
- The progression DP-1 → DP-2 → DP-3 means MORE coverage and MORE cost
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Test Your Knowledge
Which dwelling policy form does NOT include theft coverage?
A
B
C
D
Test Your Knowledge
The DP-3 dwelling policy provides what type of coverage for the dwelling structure?
A
B
C
D
Test Your Knowledge
A landlord wants comprehensive protection for a rental property including coverage for any cause of loss to the building. Which form should they choose?
A
B
C
D