Which of the following dwelling coverage forms would pay replacement cost for the dwelling?

The correct answer is that both DP-2 and DP-3 forms provide coverage on a replacement cost basis for the dwelling. This means that in the event of a covered loss, these forms allow the insured to receive a payment that covers the cost to repair or replace the damaged dwelling, without deducting for depreciation.

The DP-2 form, also known as the Broad Form, covers a wider range of perils than the DP-1 (Basic Form) and allows for replacement cost coverage for the dwelling. This form can offer coverage for specific additional risks, such as falling objects and weight of ice, snow, or sleet, which further enhances its value to policyholders seeking broader protection.

The DP-3 form, or the Special Form, goes even further by providing replacement cost coverage while also insuring the dwelling against any risk of direct physical loss or damage unless specifically excluded. This open-peril approach gives policyholders the confidence that they are protected against a vast array of potential losses.

In contrast, the DP-1 form (Basic Form) operates on a named perils basis and typically provides actual cash value for losses. This means depreciation is taken into account when a claim is settled, which can result in lower payouts than what it would