California Property & Casualty Broker-AgentProperty InsuranceMedium
A client wants to purchase a Dwelling Policy (DP) for a rental property they own. They are primarily concerned about covering the dwelling structure against common perils like fire and wind, but they also want the option to add coverage for personal property they leave on the premises for tenant use (e.g., appliances). Which DP form should their agent recommend as a starting point, and what coverage part would address the personal property concern?
- AHO-3; Coverage C
- BDP-1; Coverage C
- CDP-3; Coverage B
- DDP-2; Coverage D
Show answer & explanationAnswer & explanation
Correct answer: B. DP-1; Coverage C
DP-1 is the most basic dwelling policy, covering fire and extended perils, which addresses the primary concern. Coverage C (Personal Property) within a DP policy can be used to cover the landlord's personal property kept on the premises for the tenant's use.
Why the other options are wrong
- A. HO-3 is a homeowners policy for owner-occupied dwellings, not a dwelling policy for rental property.
- C. DP-3 offers the broadest dwelling coverage, but Coverage B is for other structures, not personal property.
- D. DP-2 offers broader coverage, but Coverage D is Fair Rental Value, not personal property.
DP-1 Coverage C
In a Dwelling Policy (DP-1), Coverage C (Personal Property) provides coverage for the insured's personal property located on the described location. For rental properties, this typically covers appliances or furniture owned by the landlord for tenant use.
- Covers landlord's personal property on premises.
- Named perils coverage.
- Does not cover tenant's personal property.
Memory trick: DP-1: Basic home, C for the landlord's 'Contents' for tenants.