Dwelling Basic (DP-1)

Provide your customers with a flexible solution that offers essential coverage on rental and seasonal homes.

You may come across a home that doesn’t need – or is not eligible for – the coverage of a full homeowners’ policy. That’s where our DP-1 program can be a big help to your customers. Often referred to as a dwelling or fire insurance policy, DP-1 gives your customers the flexibility to get essential coverage for homes that are any age, any occupancy, in fair or better condition, even homes that are up to four-family construction can be eligible. Liability protection and many other coverages can be added as options.

Eligibility

  • All occupancy types – rental, seasonal, vacant, owner-occupied
  • No restriction on the home’s age
  • Fair or better condition
  • Standalone, non-residential structures
  • Up to four-family construction
  • AMsuite only: Schedule up to 10 homes on one policy

Key coverages

Named peril protection Covers the causes of loss listed by name in the policy documents.
Actual cash value settlement Losses are settled for the actual cash value (ACV), which takes depreciation into account. In many states we offer an upgrade to full repair cost coverage.
Vacant homes eligible We offer policy terms of three, six or 12 months for a vacant home going through a renovation, between tenants or being held for sale.
Standalone structures Structures such as a pole barn, boat house or gazebo can be written using the DP-1 seasonal program.
Additional coverage Reasonable expenses for emergency repairs such as covering a roof after a storm, other structures on the property, debris removal and fire department service charge.

Coverage details

  • Loss of rent – Lost rental income is reimbursed if a covered peril causes sufficient damage that the tenant needs to move out and is no longer paying rent.
  • Additional coverage
    • Reasonable expenses for emergency repairs such as covering a roof after a storm
    • Other structures on the property.
  • Short-term rental permission – Rental terms less than three months, which are common in resort areas, can be accepted.
  • Occasional rental – With this option a seasonal home can be rented to others for a short period of time when not in use.
  • Short-term vacancy permission – A property between renters or undergoing renovations will be vacant for a few weeks or months. Adding the vacancy permission coverage keeps the property protected without the hassles of rewriting the policy.
  • Limited burglary – If a forced entry leaves signs of visible damage (for example a broken window or jimmied door) we will cover the theft of personal items or permanently attached items such as a heat pump or even copper piping.
  • Breakdown protection – Widen the policy’s scope to include the repair or replacement of major appliances, HVAC and electronics due to mechanical or electrical failure.

AMsuite only:
Theft with resulting vandalism
Water Damage
Service line
And multitude of available discounts

Q: How is the Coverage A limit determined for a home being placed in the DP-1 program?
A: If the applicant has owned the home for a while, the current market value would be used to determine the Coverage A limit. If the home is a recent purchase (12 months or newer), the purchase price serves as the current market value, excluding the value of the land. If improvements have been made, receipts are required to insure the home for a higher value.

Q: Can an agent determine what program to place the home in by looking at pictures of the home?
A: Not necessarily. Sometimes it is clear that the home has roof concerns or excessive peeling paint and is ineligible for the DP-3 product. Conversely, if the home and premises are immaculate, the risk still needs to be underwritten to include consideration of age, occupancy, and home type. Following up with the insured and accurately completing the underwriting questions and the application in modernLINK® will enable the Underwriter to confirm the home’s eligibility for a particular program. By answering the questions accurately in the system, any concerns after the policy has been written will be greatly reduced.

Q: If a home was previously insured under a traditional homeowners policy and now is rented, can we use the homeowner’s replacement cost value for the coverage limit on the new policy with American Modern?
A: If the home is placed in the DP-3 program, as long as the Coverage A amount is within 20% of the calculated replacement value, the same value may be used. If the home is being placed in the DP-1 program, the home cannot be insured for replacement cost, and instead should be insured to market value.

Q: Does American Modern accept risks with boarded windows and/or doors?
A: American Modern will accept boarded windows and/or doors in the Vacant DP-1 program. However, the boarded windows must be intended to protect the property and the home should be well maintained and otherwise qualify for the program. Dwellings vacant for more than 12 months must be submitted for approval with two photos of the home prior to binding. Vacant Manufactured Homes and Condominiums are eligible for this program. The risk must be in fair condition, exhibit proper maintenance, and the cause of temporary vacancy must be due to one of the following reasons:

  • Renovation or remodeling
  • Between tenancy or real estate closings
  • Dwellings held for sale and on the market

Q: When can Full Repair Cost coverage be added to a DP-1 policy?
A: Full Repair Cost can be added as long as the other qualifications are met for the DP-1 program. Note, the property must be insured to market value, not replacement cost.

Q: Which settlement option is used for the DP-1 program?
A: Actual Cash Value. Full Repair Cost may also be available for eligible homes.

Q: In which program should I place a rental/landlord vacant home that is in excellent condition but on the market to be sold?
A: These homes can be placed in the DP-3 Rental program with the Vacancy Permission endorsement if the home meets the qualifications for the DP-3 program.

Q: If my customer buys a new rental home that is move-in ready, but vacant, can I place it in the DP-3 program?
A: Yes, if the home is in excellent condition and qualifies for the DP-3 Rental program and will be occupied within 30 days. If it will not be occupied within 30 days, the Vacancy Permission endorsement should be added to the policy.

Q: If a home has both fuses and a breaker box, can it be placed in the DP-3 program?
A: No, homes with fuses are not eligible for the DP-3 program. The home must have circuit breakers in order to qualify.

Program details may vary by state. For specifics, please log in to modernLINK and consult the program manual for specifics located under the eForms tab.