What Does a DP1 Insurance Policy Cover?
Understand the essential coverages and key limitations of a DP1 insurance policy, a foundational property protection option.
A DP1 insurance policy, also known as a Dwelling Fire Form 1, is a basic, named-peril insurance option for property owners. Its primary purpose is to provide property coverage for structures that are not occupied as a primary residence. This policy is frequently utilized for rental properties, vacant homes, or properties undergoing renovation. The DP1 policy offers a limited scope of protection compared to more comprehensive dwelling insurance forms.
Covered Perils
The DP1 policy is a named-peril policy, meaning it only provides coverage for losses explicitly listed within the policy document. Core perils covered under a DP1 policy include fire, lightning, and internal explosion. Fire coverage addresses direct physical loss or damage to the insured dwelling and personal property caused by fire, including damage from flames, smoke, and actions taken to extinguish the fire.
Lightning coverage extends to damage caused by a lightning strike, such as structural damage or damage to electrical systems. An internal explosion refers to an explosion occurring within the insured structure, such as one caused by a malfunctioning furnace or water heater.
Damage from an internal explosion could involve structural compromise, broken windows, or other related destruction to the property. These perils represent the foundational coverage provided by a DP1 policy. The policy does not automatically extend to other types of damage unless explicitly added through an endorsement.
Exclusions
DP1 policies come with common exclusions, meaning they do not provide coverage for certain perils or situations. Standard exclusions often include damage from windstorm, hail, freezing, and theft. Vandalism or malicious mischief are also typically not covered.
Water damage, unless specifically caused by an internal explosion, is generally excluded. This means damage from burst pipes, overflowing appliances, or groundwater is not covered. Falling objects, such as trees or debris, are also typically excluded perils.
The DP1 policy does not usually provide liability coverage, which protects the property owner against claims for bodily injury or property damage to others. If a property owner desires protection against these common exclusions, they typically need to purchase a different dwelling policy form, such as a DP2 or DP3, or add specific endorsements.
Other Standard Coverages
Beyond the direct dwelling perils, DP1 policies often include additional standard coverages. One common inclusion is coverage for other structures on the insured premises. This typically applies to detached structures like sheds, detached garages, or fences, providing protection against the same named perils as the main dwelling.
Another standard coverage is fair rental value. This provides reimbursement to the property owner for lost rental income if the dwelling becomes uninhabitable due to a covered peril. The coverage usually extends for the reasonable time required to repair or rebuild the property.
Debris removal is also a standard feature, covering the necessary expenses to remove the debris of covered property after a loss caused by a named peril. These additional coverages enhance the basic protection offered by the DP1 policy.