Special Form Policies (HO-3, DP-3)
Definition:
Insurance forms that provide open-perils coverage for structures.
Explanation:
These policies insure against all risks except those specifically excluded. They are more comprehensive than named perils forms.
Example:
If your rental property insured with a DP-3 suffers unexplained roof damage, it’s covered unless specifically excluded.
Why it matters:
This term affects how claims are handled and what payout a homeowner may receive.