3.1 Dwelling Policy Forms DP-1, DP-2, DP-3

Alaska Property & Casualty Insurance State

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1 Standalone Coverage Map

Standalone Coverage Map

2 Introduction: Alaska Property & Casualty Insurance Exam Overview

Alaska Property & Casualty Exam Overview

3 National Portion: Insurance Fundamentals

1.1 Risk, Hazards, Perils, and the Law of Large Numbers 1.2 Insurable Interest, Indemnity, and Other Insurance Principles 1.3 Insurance Contract Law and Elements 1.4 Policy Structure: Declarations, Insuring Agreement, Conditions, Exclusions 1.5 Parties, Agents vs. Brokers, and Authority

4 National Portion: Property Insurance Concepts

2.1 Causes of Loss / Named-Peril vs. Open-Peril 2.2 Valuation: ACV, Replacement Cost, and Functional Value 2.3 Coinsurance and the Coinsurance Formula 2.4 Deductibles, Limits, and Loss Settlement 2.5 Common Property Policy Conditions and Clauses

5 National Portion: Dwelling Policies (DP)

3.1 Dwelling Policy Forms DP-1, DP-2, DP-3 3.2 Dwelling Coverages A-E and Other Coverages 3.3 Dwelling Perils, Conditions, and Endorsements 3.4 Mobile Home and Specialized Dwelling Coverage

6 National Portion: Homeowners Policies - Forms & Section I

Homeowners Forms HO-2 through HO-8 and Eligibility Section I Coverages A-D and Additional Coverages Section I Perils Insured Against and Exclusions Replacement Cost vs. ACV and Loss Settlement in Homeowners

7 National Portion: Homeowners Policies - Section II & Endorsements

Section II Coverages E (Liability) and F (Medical Payments) Homeowners Conditions and Duties After Loss Common Homeowners Endorsements

8 National Portion: Personal Auto Policy - Liability & Injury

6.1 Personal Auto Policy Structure and Eligibility 6.2 Part A Liability and Supplementary Payments 6.3 Part B Medical Payments 6.4 Part C Uninsured/Underinsured Motorists

9 National Portion: Personal Auto Policy - Physical Damage & Duties

7.1 Part D Coverage for Damage to Your Auto 7.2 Exclusions and Part E Duties After an Accident 7.3 Part F General Provisions, Endorsements, and No-Fault Concepts

10 National Portion: Liability Insurance Concepts

8.1 Negligence, Torts, and Legal Liability 8.2 Defenses, Damages, and Vicarious Liability 8.3 Occurrence vs. Claims-Made Triggers 8.4 Bodily Injury, Property Damage, and Personal/Advertising Injury

11 National Portion: Commercial Property Insurance

9.1 Commercial Package Policy Structure and Common Policy Conditions 9.2 Building and Personal Property Coverage Form (BPP) 9.3 Causes of Loss Forms (Basic, Broad, Special) 9.4 Business Income and Extra Expense 9.5 Commercial Property Endorsements and the BOP

12 National Portion: Commercial General Liability - Coverages

10.1 CGL Coverage A: Bodily Injury and Property Damage Liability 10.2 CGL Coverage B: Personal and Advertising Injury, Coverage C: Medical Payments 10.3 Who Is an Insured and Supplementary Payments

13 National Portion: Commercial General Liability - Limits, Triggers & Exclusions

11.1 CGL Limits of Insurance and Aggregates 11.2 Occurrence vs. Claims-Made CGL and Retroactive Dates 11.3 Key CGL Exclusions and Endorsements

14 National Portion: Commercial Auto Insurance

12.1 Business Auto Coverage Form and Covered Auto Symbols 12.2 Commercial Auto Liability and Physical Damage 12.3 Motor Carrier / Trucking and MCS-90 12.4 Garage Coverage Form and Garagekeepers 12.5 Commercial Auto Endorsements

15 National Portion: Workers Compensation

13.1 Workers Compensation Statutory Background and Benefits 13.2 Part One (Workers Comp) and Part Two (Employers Liability) 13.3 Premium Basis, Experience Modification, and Classification 13.4 Other States, USL&H, and Federal Acts 13.5 Workers Comp Exclusions and Endorsements

16 National Portion: Other Commercial Lines - BOP, Crime & Marine

14.1 Businessowners Policy (BOP) in Depth 14.2 Crime and Fidelity Coverage 14.3 Inland Marine and Nationwide Marine Definition 14.4 Ocean Marine Coverages (Hull, Cargo, Freight, P&I)

17 National Portion: Other Commercial Lines - Specialty & Professional

15.1 Farm and Agricultural Coverage 15.2 Commercial Umbrella and Excess Liability 15.3 Professional Liability and Errors & Omissions 15.4 Directors & Officers and Employment Practices Liability

18 National Portion: Other Commercial Lines - Surety, Flood & Specialty

16.1 Surety and Fidelity Bonds 16.2 National Flood Insurance Program (NFIP) 16.3 Cyber, Aviation, and Other Specialty Lines

19 National Portion: Insurance Regulation & Market Conduct

17.1 State Regulation, Licensing, and the McCarran-Ferguson Act 17.2 Rates, Forms, Solvency, and Guaranty Associations 17.3 Producer Authority, Fiduciary Duty, and Company Operations

20 National Portion: Ethics & Unfair Trade Practices

18.1 Unfair Trade Practices and Unfair Claims Settlement 18.2 Producer Ethics, Errors & Omissions Exposure, and Fiduciary Conduct 18.3 Privacy, Fraud, and Consumer Protection

21 Chapter 1: Alaska P&C Insurance Regulation & Licensing

1.1 Alaska Division of Insurance 1.2 Alaska P&C Producer Licensing Requirements 1.3 Alaska Producer Duties and Responsibilities

22 Chapter 2: Alaska Property Insurance

2.1 Alaska Homeowners Insurance 2.2 Alaska Property Insurance Policy Provisions

23 Chapter 3: Alaska Auto & Casualty Insurance

3.1 Alaska Auto Insurance Requirements 3.2 Alaska Commercial Liability Insurance

24 Chapter 4: Alaska Ethics & Professional Conduct

4.1 Alaska Ethical Standards for Insurance Producers 4.2 Alaska Privacy Laws and Regulatory Compliance

3.1 Dwelling Policy Forms DP-1, DP-2, DP-3

Key Takeaways Explain This Topic AI

ISO publishes three dwelling forms: DP-1 Basic (DP 00 01), DP-2 Broad (DP 00 02), and DP-3 Special (DP 00 03); coverage and premium rise across the series.

DP-1 is named-perils and settles on Actual Cash Value; DP-2 and DP-3 settle on Replacement Cost when the dwelling is insured to at least 80% of value.

DP-3 provides open-perils (all-risk) on the dwelling and other structures but only broad named perils on personal property.

No dwelling form includes liability; Coverage L and M are always added by endorsement.

Theft is excluded on DP-1 even with Extended Coverage; theft is built into DP-2 and DP-3.

Last updated: June 2026

Why the Dwelling Program Exists

The ISO Dwelling Property Program insures one-to-four family residences that do not qualify for, or do not need, a Homeowners policy. Typical accounts include rental dwellings, seasonal homes, dwellings under construction, and homes that fail Homeowners underwriting because of older roofs or prior losses.

Because the program is monoline property, the producer must add liability separately, unlike the package Homeowners forms. The program also accepts dwellings with incidental occupancies , such as a home office or a one-family rental, that a Homeowners form might decline. Three forms make up the program, and each carries an ISO edition number you should recognize on the exam: DP 00 01, DP 00 02, and DP 00 03.

The Three Forms at a Glance

• Form ISO Number Dwelling Perils Contents Perils Loss Settlement
• DP-1 Basic DP 00 01 Named (fire, lightning, internal explosion; +EC, V&MM optional) Named ACV
• DP-2 Broad DP 00 02 Broad named perils Broad named Replacement Cost
• DP-3 Special DP 00 03 Open perils (all-risk except excluded) Broad named Replacement Cost

Coverage broadens from top to bottom. DP-1 is the narrowest and cheapest; DP-3 is the broadest and the closest dwelling parallel to the HO-3 Homeowners form.

DP-1: Basic Form

In its core state the DP-1 insures only fire, lightning, and internal explosion . The remaining common perils are added by attaching the Extended Coverage (EC) group and Vandalism & Malicious Mischief (V&MM) :

• EC perils: Windstorm/hail, Civil commotion/Riot, Smoke, Aircraft, Vehicles, Volcanic eruption, Explosion
• V&MM must be added separately

Key DP-1 facts that show up on the exam:

• Pays on Actual Cash Value (ACV) = replacement cost minus depreciation
• No theft coverage , even after EC and V&MM are added
• Windstorm covers interior damage only after wind first creates an opening in the roof or wall
• Exam tip: The two facts tested most about DP-1 are "no theft" and "ACV settlement."

DP-2: Broad Form

The DP-2 (DP 00 02) is a broad named-perils form. It automatically includes EC and V&MM, adds theft , and brings in additional broad perils such as falling objects; weight of ice, snow, or sleet; accidental discharge or overflow of water from a plumbing system; freezing of plumbing; and sudden tearing apart of a steam or hot-water heating system. It settles the dwelling on Replacement Cost subject to the 80% rule.

The DP-2 is the right fit for an owner who wants meaningful contents and theft protection but still does not need the full open-perils breadth of the DP-3.

DP-3: Special Form

The DP-3 (DP 00 03) insures the dwelling and other structures on an open-perils basis: any direct physical loss is covered unless the policy specifically excludes it, which shifts the burden of proof to the insurer to show an exclusion applies. Personal property, however, remains on the broad named-perils list.

This split, open on the building and named on contents, is the single most tested DP-3 distinction. The DP-3 settles the dwelling on Replacement Cost and is the closest dwelling parallel to the HO-3 Homeowners form, making it the most common choice for owner-occupied dwellings written outside the Homeowners program.

Replacement Cost and the 80% Rule

DP-2 and DP-3 pay replacement cost on the dwelling only if the insured carries at least 80% of the dwelling's full replacement value at the time of loss. If coverage falls below 80%, the larger of ACV or the coinsurance-style formula applies:

Recovery = (Carried / 0.80 x RC value) x Loss, then subtract the deductible

Worked example: A home costs $300,000 to replace. The 80% requirement is $240,000 . The owner insures it for $180,000 and has a $1,000 deductible partial loss of $40,000.

• Recovery factor = 180,000 / 240,000 = 0.75
• 0.75 x 40,000 = $30,000, minus $1,000 deductible = $29,000 paid

Underinsuring cost this owner $11,000.

Eligibility and Positioning of the Dwelling Program

The Dwelling Property program (DP-1/2/3) exists for residences that do not qualify for or do not need a Homeowners policy. Typical uses:

Rental (non-owner-occupied) dwellings — landlords insuring property they rent out.

Seasonal or secondary homes .

Dwellings of 1–4 families where the owner wants property-only coverage.

Risks that fail HO underwriting (older homes, vacant, higher-hazard) and may go to a FAIR Plan on a dwelling form.

Unlike the Homeowners form, the dwelling program is modular : it does not automatically include theft, liability, or medical payments — these are added by endorsement. This makes it flexible for investor and specialty exposures.

Reading the Three Forms as a Progression

Think of DP-1, DP-2, and DP-3 as ascending tiers:

• Feature DP-1 DP-2 DP-3
• Perils basis Basic named peril Broad named peril Open peril (structure)
• Loss settlement (dwelling) ACV Replacement cost Replacement cost
• Additional living expense Optional/limited Included Included
• Premium Lowest Middle Highest

The DP-3 is the workhorse for rental dwellings because it mirrors the open-peril structure coverage of an HO-3 while leaving out the owner-occupant features. Trap: candidates confuse DP-3 (open peril on the building) with the contents basis, which stays named peril even on the DP-3.