THE DWELLING POLICY
1. Introduction
The dwelling policy provides protection for individuals and families against loss to their dwelling and personal property.
If you’re already familiar with the homeowners policy, which also covers dwellings and personal property, you may wonder what the difference is between the two policies. We’ll have an opportunity to look at both forms in detail, but two key differences are:
■the dwelling policy provides more limited property coverage than the homeowners policy; and
■the unendorsed dwelling policy provides property coverage only, while the homeowners policy provides a package of property and liability coverages.
There are three separate dwelling policy forms: the basic form, the broad form, and the special form, each providing a higher level of coverage than the last.
In this course, we’ll focus on the dwelling 2002 policy issued by the Insurance Services Office (ISO).
2. Eligibility, Insureds
To be covered under a dwelling policy, a dwelling may have up to five boarders and up to four apartments. It may be a townhouse or a row house.
The dwelling does not have to be occupied by the owner, and it may be under construction.
A dwelling policy may also be used to insure a mobile home meeting certain qualifications, including that it be permanently located.
Mobile homes may only be covered under the basic form.
Dwelling policies may be used to insure homes that do not qualify for homeowners insurance.
For example, the owner of a home that is rented to tenants could not insure the home under a homeowners policy but could insure it under a dwelling policy.
Dwelling policies are also frequently used to insure vacation homes.
Eligible dwelling property does not have to be exclusively residential.
Certain incidental business and professional occupancies are allowed. These operations must be conducted by the insured, provide service rather than sales, and involve no more than two people working on the premises at any one time.
Examples of permitted occupancies include beauty parlors, photography studios, and professional offices.
The dwelling policy covers the named insured and the insured’s spouse, as long as the spouse lives in the same household as the insured.