Understanding the Types of Homeowner Insurance Policies for Your Dwelling | Department of Insurance, SC (2024)

FAQs

What are the three types of dwelling policies? ›

What are the different types of dwelling policies? Like homeowners insurance policies, dwelling policies come in different tiers of coverage. These include DP-1 (basic), DP-2 (broad) and DP-3 (special), with DP-3 providing the most coverage.

Homeowners insurance policies generally cover destruction and damage to a residence's interior and exterior, the loss or theft of possessions, and personal liability for harm to others. Three basic levels of coverage exist: actual cash value, replacement cost, and extended replacement cost/value.

What it is: HO-3 coverage is the most common type of homeowners insurance. It is also known as special form coverage. Under HO-3 insurance, your home will typically be covered at its replacement cost, while your personal property will be covered up to its actual cash value.

Along with your house, connected structures such as attached garages are often protected by dwelling coverage insurance. It differs from home insurance, which covers the surrounding land and detached buildings on the property around your home.

Houses, apartments, rowhouses, townhouses and duplexes are types of houses. They are referred to as a dwelling unit.

There are several factors that insurance companies look at to determine dwelling insurance rates, including: The cost to rebuild your home. The materials that make up your home, such as stone, stucco, brick and wood. The age of your home.

What's the difference between HO3 and HO6? The main difference between an HO3 policy for a single-family home and an HO6 condo insurance policy is that while an HO3 covers the physical structure of your home itself, an HO6 policy only covers what's inside the walls of your condo.

HO-1 Basic Form Policy: The HO-1 policy is the most basic and limited homeowner insurance option. It provides coverage for a specific list of perils, such as fire, lightning, hail, theft, and vandalism.

Which one is not protected by most homeowners insurance? ›

Earthquake, flood, mold, earth movement, and “wear and tear” are some of the perils that are usually excluded. When an insurer writes your homeowners coverage, the insurer is legally obligated to offer you earthquake coverage for an additional premium.

Dwelling coverage only applies to structures attached to your main residence, meaning that detached garages, sheds, barns, unattached guest homes, fences, or any other detached structures are typically not covered under dwelling coverage.

Personal property coverage, which is Coverage C within home insurance policies, helps to pay for your personal items that have been damaged, destroyed or stolen due to a covered peril. It's standard protection within many home insurance policies and is pivotal to cover those personal items that mean the most to you.

Your dwelling coverage limit should be enough to rebuild your home if it's destroyed. This amount isn't necessarily the same as the price you paid for the house. Instead, this number depends on the features of your home and the building costs in your area.

Although there are many insurance policy types, some of the most common are life, health, homeowners, and auto. The right type of insurance for you will depend on your goals and financial situation. Consumer Financial Protection Bureau.

Just like homeowners insurance, there are several different types of dwelling fire policies. DP-1 is known as the basic form, DP-2 is known as the broad form and DP-3 is known as the special form. Each provides a significantly different level of coverage.

The biggest difference between DP3 and HO3 is the type of risk each covers. DP3 policies are most commonly for properties the owner rents to others. An HO3 policy is for owner-occupied homes. Notice, too, that some coverages are added by default, while others are optional.

The basic form covers only damage from fire, lightning, and internal explosion, but additional perils can be covered by endorsem*nt.