Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Property InsuranceEasy
A client owns a duplex and lives in one unit while renting out the other. They are concerned about potential damage to the entire structure from a fire. Which Dwelling Policy form is most appropriate for their situation?
- ADP-1 Basic Form
- BHO-3 Special Form
- CDP-2 Broad Form
- DDP-3 Special Form
Show answer & explanationAnswer & explanation
Correct answer: D. DP-3 Special Form
The DP-3 Special Form provides the broadest coverage for the dwelling and other structures on an open perils basis, which is ideal for an owner-occupied duplex where the owner wants comprehensive protection against various risks like fire.
Why the other options are wrong
- A. The DP-1 Basic Form offers named perils coverage for only a limited number of perils, making it less comprehensive than needed.
- B. The HO-3 Special Form is a homeowners policy designed for owner-occupied single-family homes, not specifically for duplexes with a rented unit, and may not provide the desired coverage structure for the rental portion.
- C. The DP-2 Broad Form provides named perils coverage for more perils than DP-1, but still not as broad as the open perils coverage of DP-3.
DP-3 Special Form
The DP-3 Special Form is a dwelling policy that provides open perils coverage for the dwelling and other structures, and named perils coverage for personal property.
- Broadest coverage for dwelling/other structures (open perils)
- Named perils coverage for personal property
- Suitable for owner-occupied dwellings, including duplexes
Memory trick: Dwelling Policies: Basic, Broad, Special, each level adds more protection.