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A landlord buys an ISO DP-1 Basic Form on a rental house and elects Coverage C — Personal Property for $25,000 to insure landlord-owned appliances and lawn equipment. Burglars break in and steal the refrigerator and lawnmower. How does the unendorsed DP-1 respond?
APays the loss at full replacement cost under Coverage C, since burglary and theft are covered perils on the DP-1 basic form
BPays the loss at actual cash value under Coverage C, since theft is included on the basic dwelling form
CPays the loss under Coverage C but only up to a $2,500 special sublimit applicable to theft losses
Excludes the loss entirely — the standard DP forms do not provide theft coverage without a theft endorsement
Why this is the answer
The ISO Dwelling forms — DP-1, DP-2, and DP-3 alike — do not include theft as a covered peril in the standard policy. This is a major structural difference from the Homeowners forms, which automatically include theft on Coverage C. To insure against theft on a dwelling policy, the insured must add the DP 04 72 Broad Theft Coverage endorsement (owner-occupied dwellings) or the DP 04 73 Limited Theft Coverage endorsement (non-owner-occupied rental dwellings). Without one of these, the landlord's burglary loss is excluded (ISO DP 00 01 Section I Perils Insured Against).
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