South Carolina Personal Lines Practice Exam

What does the DP-3 (Special) dwelling policy typically cover?

1. Only specified named perils

2. All perils except those excluded

3. Only property damage caused by fire

4. Water damage and theft

The correct answer is: All perils except those excluded

The DP-3 (Special) dwelling policy is designed to provide comprehensive coverage for residential properties, specifically targeting owner-occupied homes and properties rented to others. This policy is unique because it operates on an all-risk basis, meaning it covers all perils except for those that are explicitly excluded in the policy documentation. This feature allows homeowners significant peace of mind, as it protects against a wide range of potential hazards, such as theft, vandalism, or accidental discharge of water. While certain perils, like flood or earthquake, may not be included, the broad coverage offered by the DP-3 is a key advantage for homeowners, ensuring they are protected against unexpected events that could damage their property. In contrast, policies that cover only specified perils (like named-peril policies) would list out each hazard that is covered, which could leave homeowners vulnerable to various risks. Thus, the DP-3's all-perils coverage (with exclusions) distinctly sets it apart, making it an ideal choice for many property owners seeking robust protection.