Dwelling Policy Practice Test

On a DP-3 Dwelling Property Special Form policy, how is personal property coverage handled?

1. It is not covered

2. It is provided at actual cash value

3. It is the same as provided on the DP-2 Broad Form

4. It is offered as an optional add-on

The correct answer is: It is the same as provided on the DP-2 Broad Form

In the context of the DP-3 Dwelling Property Special Form policy, personal property coverage is indeed similar to that provided under the DP-2 Broad Form. Both forms provide coverage for personal property on a named perils basis, meaning that specific risks are outlined in the policy as covered. This alignment demonstrates the continuity in coverage features between the two forms, reinforcing the understanding that personal property is protected against the same set of named perils under both policies. When comparing the other options, the assertion that personal property is not covered would be inaccurate since the DP-3 does provide personal property coverage. Stating that it is provided at actual cash value does not apply here, as personal property under the DP-3 is typically covered at Replacement Cost, which is an upgrade from the Actual Cash Value method used under other policies. Lastly, the characterization of personal property being offered as an optional add-on does not apply; coverage for personal property is a standard feature under the DP-3, similar to the DP-2, rather than an optional enhancement. Understanding that the DP-3 policy covers personal property similarly to the DP-2 fosters clarity about the coverage expectations and reinforces the essential details of the dwelling policies in question.