Dwelling policy forms are monoline policies used to insure residential property. Dwelling property forms are used to insure most dwelling property including dwellings in the course of construction. The dwelling may be owner occupied or non-owner occupied (rental property). Most dwellings used for residential purposes are eligible for coverage under a dwelling form except farms, structures that have more than four units and any structure used principally for commercial or business purposes. Currently, the Dwelling '02 program is used in almost every state. This program incorporated language and policy provisions from the Standard Fire policy into a dwelling policy to cover residential property.

The Dwelling '02 program consists of three policy forms including the: Dwelling Property Basic Form (DP1) Dwelling Property Broad Form (DP2) Dwelling Property Special Form (DP3) The difference between these forms lies with the various causes of loss (perils) that are covered by each policy.

All dwelling policies cover 8 extended coverages. Extended Coverages • Windstorm • Hail • Aircraft damage • Riot or civil commotion • Vehicle damage • Volcanic eruption • Explosion • Smoke damage These extended coverages are included automatically in the DP1, DP2 and DP3 policy forms. An acronym commonly utilized to remember these eight extended coverages is WHARVVES.

Basic Coverage (DP1) This policy form provides the most limited coverage for dwellings and their contents as compared to the DP2 and DP3 policies. DP1 covers: • Hostile fire • Lightning • Internal Explosion A hostile fire is one that is burning in an area where it should not be burning. If fire escapes from a wood burning stove and causes damage to other property, there would be coverage. The fire burning within the wood burning stove is known as a friendly fire since it is burning where it should be. Only damage or loss caused by a hostile fire is covered.

Dwelling Property Broad Form (DP2) The perils insured against in a DP2 policy include all perils covered in a DP1 policy and the following "named perils": • Weight of ice, snow and sleet which causes damage to property contained in the building. • Loss or vandalism to covered property caused by burglars • Loss caused by falling objects but not damage to fences, awnings, outdoor equipment, or outdoor radio and television antennas and aerials. Damage to the object that "falls" is not covered.

• Loss caused by accidental discharge or overflow (i.e. bursting pipes) of water or steam from plumbing, heating, air conditioning (A/C) or a fire protective sprinkler system. • Damage caused by the sudden and accidental tearing cracking, burning or bulging of a steam or hot water heating (i.e. bursting pipes), air conditioning or protective sprinkler system. • Loss due to the freezing of a plumbing, heating, A/C or sprinkler system or household appliance. • Loss caused by artificially generated electrical current which results in sudden and accidental damage. Tubes, transistors and similar components are not covered. • Volcanic eruption (other than loss caused by shock waves or tremors.)

In addition to the previous named perils, DP2 also provides coverage for: Collapse The insurer will pay for direct physical loss to covered property involving collapse of a dwelling (or any part of it) as a result of: • A covered peril • Hidden decay • Hidden insect or vermin damage • Weight of rain which collects on a roof • Use of defective materials • Weight of contents, equipment, animals or people Collapse does not include settling, cracking, shrinking, bulging or expansion.

Special form (DP3) The DP3 is an "all-risk" or "open peril" policy and provides the broadest protection of all the dwelling policies. The DP3 is identical to the DP2 except for the perils insured against (open-risk vs. named peril). An all-risk policy covers all types of direct physical loss EXCEPT those specifically excluded in writing in the policy.

All dwelling policy forms exclude losses from: • Ordinances or laws require more expensive reconstruction than was used in the original structure i.e. safety glass in place of regular glass in a building) • Earth movement Except for direct loss by fire or explosion resulting from earth movement • Airborne shockwaves • Water damage Flooding Water back up into a building Water leaking or seeping from below ground

Tidal surge Rapid run-off Mudslide • Power interruption • Insured’s neglect • Inherent vice A characteristic of a given piece of property that causes it to depreciate, spoil, break, disintegrate, etc. • War and nuclear hazard • Insured or someone else at the insured direction destroys property • Mold and Dry Rot

Dwelling Policy Coverages DP1, DP2 and DP3 policies all provide four divisions of coverage, sometimes referred to as "insuring agreements." Coverage A Dwelling Coverage B Other Structures Coverage C Personal Property Coverage D Rental Value The DP2 and DP3 forms automatically include Coverage E (Additional Living Expenses) which may also be added to the DP1 by endorsement.

Coverage A Dwelling This insuring agreement provides coverage for the dwelling principally used for residential purposes (owner or non-owner occupied). Coverage A also includes structures attached to the dwelling such as an attached garage or carport. Coverage A also protects against loss to materials and supplies on the residence premises used in construction or repair of the dwelling and outdoor or building equipment used to service the premises (power tools, riding lawn mowers, etc).

Coverage B Other Structures 10% of coverage A applies to structures on the residence premises detached from the dwelling by a clear space. “Other Structures” include: • Garage not attached to the dwelling • Swimming pool • Cabana • Any other structures on the premises connected to the dwelling by only a fence, utility line or similar connection.

Note: Coverage B is not an additional amount on DP1. The insured may use up to 10% of the Coverage A limit for "Other Structures." If a loss is paid by this section of coverage, the remaining insurance on the dwelling is reduced by the amount of the paid loss. With DP2 and DP3 coverage B is paid in addition to coverage A.

Coverage C Personal Property Coverage C will provide protection up to the coverage amount selected by the insured against loss to personal property owned or used by the named insured or resident family members while on the insured premises. The default amount of coverage is 50% of coverage A limits. A limited amount (10% of the contents limit) is provided for personal property away from the premises. This coverage is worldwide. If personal property is moved to a newly acquired principal residence, the property is covered at both locations for thirty days.

Personal property not covered includes: • Accounts • Bills • Currency, coins, bullion, gold, silver • Deeds • Securities • Evidences of debt • Manuscripts • Passports • Tickets • Stamps • Animals, birds, and fish • Aircraft and its parts • Motor vehicles (except those used to maintain or service the premises or assist the handicapped) • Watercraft (row boats and canoes under 26 feet long are covered) • Electronic data and discs • Credit card or fund transfer cards • Property of roomer, renter or boarder

Coverage D Loss of Rent If part of the covered residence that is held for rental (or actually rented) to others becomes uninhabitable due to a covered loss under Coverage A, B or C, the contract will pay the fair rental value. The coverage amount to be carried is selected by the named insured and may be up to 10% of Coverage A. Coverage E Additional Living Expense Sometimes referred to as "Loss of Use", this coverage section will pay any increased expenses incurred by the insured if a residence becomes uninhabitable due to a covered loss, and the insured must move out while it is being repaired, replaced or rebuilt.

Note: Applies only to DP2 and DP3, can be added by endorsement DP1. If there is an order of civil authority to vacate the house due to an impending insured peril, the insurer will pay additional living expense up to two weeks (E.g. insured is required to leave home due to a flood).