5.1 Dwelling Program Eligibility

Properties insured under the Dwelling Program may be occupied by either the owner or tenants. To qualify, the property must be used primarily for residential purposes and may contain no more than four dwelling units. It may also house up to five roomers or boarders. Certain incidental business activities may be permitted when the property remains principally residential and the business does not involve retail sales. Examples include professional offices, instructional studios, beauty shops, and schools.

Mobile homes may qualify for coverage under the Dwelling Program only when insured using the Basic Form (DP–1) and when specific eligibility requirements are satisfied. For example, the mobile home may be required to be permanently attached to a foundation.

Farm dwellings are not eligible for coverage under the Dwelling Program because they involve different property and liability exposures. These properties generally require a policy specifically designed for farms.

An Insurance Story

The Nelsons' rental property contains one dwelling unit occupied by two tenants who live together and pay rent. To insure the property, the Nelsons purchase a Broad Form Dwelling policy (DP–2). The policy provides property coverage for the house, the attached garage, a detached shed, and maintenance equipment used to service the property, such as a lawn mower.

Although Dwelling policies are most commonly issued to property owners who are responsible for insuring the building, an eligible policy may also be issued to a tenant. In that situation, the policy can provide coverage for the tenant's personal property rather than the dwelling structure.

Under all Dwelling coverage forms, the term insured includes the person named in the policy and the named insured's spouse, provided the spouse is a resident of the same household.