P&C Exam Q&A Practice: 5 Dwelling Policy Questions (DP-1, DP-2, DP-3)

Dwelling policies (DP-1, DP-2, DP-3) are the exam's favorite blind spot. Many candidates study the homeowners forms for weeks, then meet a DP question cold. Here are five questions in exam format. Answer each one before reading the explanation.

Question 1

An insured has a DP-2 form. A burglar breaks in and steals a laptop. Will the policy pay?

Answer: No. Theft of personal property is excluded under all three dwelling forms unless an endorsement adds it. This is the single most-missed DP fact on the exam. If a question mentions theft and you see "DP" anywhere in it, think endorsement or think denial.

Question 2

Under the DP-3, which statement is TRUE? (A) Both the dwelling and contents are covered on an open-perils basis. (B) The dwelling is open perils; contents are broad named perils. (C) Both are broad named perils. (D) Contents are open perils; the dwelling is named perils.

Answer: B. The DP-3 covers the dwelling and other structures against open perils (special form), but personal property only for the broad named perils. That split is exactly why the DP-3 is heavily tested.

Question 3

A dwelling insured under a DP-1 is destroyed by fire. The loss to the dwelling will be settled on what basis?

Answer: Actual cash value (ACV). The DP-1 pays ACV on the dwelling. The DP-2 and DP-3 both settle the dwelling at replacement cost. The exam loves this 1-versus-2-and-3 distinction.

Question 4

The insured's dwelling has been vacant for 75 days. Vandals break windows and spray-paint the walls. Coverage under the DP-3?

Answer: Excluded. Vandalism and malicious mischief are covered under the DP-2 and DP-3, but that coverage is void when the dwelling has been vacant for more than 60 days. Watch vacancy timelines closely: 60 days is the DP vandalism cutoff.

Question 5

Which of the following is covered under the DP-2 broad form without an endorsement? (A) Earthquake (B) Freezing of a plumbing system (C) Flood (D) Sewer backup

Answer: B. Sudden and accidental freezing of pipes, along with discharge from plumbing, is among the broad-form perils. Earthquake, flood, and sewer backup each require their own endorsement everywhere on this exam: homeowners, dwelling, and commercial alike.

How to study the DP forms

• Compare all three forms in one table: perils basis, settlement basis, theft, vandalism.

• Memorize the "never covered without endorsement" list: theft, earthquake, flood.

• Drill vacancy timelines: more than 60 days of vacancy kills vandalism coverage on DP forms.

These explanations reflect standard exam content. Real-world policies and state rules vary, so treat this as exam prep, not coverage advice.

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