South Carolina Personal Lines Practice Exam

What type of risks does the DP1 Basic Form commonly cover?

1. Broad form perils

2. Specific risks of theft and vandalism

3. Fire, Lightning, and Internal Explosion

4. Comprehensive risk coverage

The correct answer is: Fire, Lightning, and Internal Explosion

The DP1 Basic Form, also known as the Dwelling Property 1 Basic Form, is specifically designed to provide coverage for a limited number of perils. It primarily covers three types of risks: Fire, Lightning, and Internal Explosion. This limited coverage is meant for basic protection of dwelling properties and does not extend to broader perils or additional risks that might occur in a dwelling. The focus on these specific perils means that the DP1 Basic Form is more basic compared to other forms like the DP2 (Broad Form) or DP3 (Special Form), which include coverage for broader risks, including theft and vandalism. The DP1 Basic Form's strong focus on the fundamental hazards of fire and internal explosions reflects its foundational nature in property insurance, making it suitable for scenarios where the property owner seeks low-cost coverage primarily against the risks of fire-related incidents. Additionally, comprehensive risk coverage is not a feature of the DP1 Basic Form; instead, it is designed for those seeking essential and more economical options for insuring their dwellings against significant but limited types of loss.