1. Forms
2. DL
3. DL-24-04

What the form is

The DL 24 04 Additional Residence Premises Rented to Others endorsement is designed to be attached to a Dwelling Policy (DP) or potentially a Homeowners Policy (HO) that includes Personal Liability Coverage (Coverage L). Its primary function is to extend the personal liability coverage provided under the main policy to other residential properties owned by the named insured (or their resident spouse) which are rented out to others. Essentially, it broadens the definition of "insured premises" to include these specified rental locations, ensuring that the insured has liability protection for incidents occurring at these additional properties.

Classes of business it applies to

This endorsement is typically used for individuals who own and rent out residential properties in addition to their primary residence. This can include:

• Owners of one to four-family dwellings that are rented to tenants. For example, an individual who owns a single-family home, a duplex, a triplex, or a four-plex and rents these units out.
• Insureds who have a seasonal or secondary home that is rented to others for parts of the year.

It is not intended for large-scale commercial apartment complexes or extensive real estate investment portfolios, which would typically require a commercial general liability policy.

Special considerations

• Scheduled Premises: It is crucial that each additional residence rented to others is specifically listed (scheduled) on the endorsement for coverage to apply to that location.
• Underlying Policy Conditions: All terms, conditions, and exclusions of the underlying personal liability coverage (e.g., DL 24 01 or the liability section of a homeowners policy) will still apply to the rented premises, unless specifically modified by this endorsement.
• Business Exclusion: Standard personal liability policies often contain an exclusion for business activities. However, the rental of a one to four-family dwelling is often an exception to this exclusion or can be covered by an endorsement like the DL 24 04. It's important to verify how the base policy and this endorsement interact regarding the business exclusion.
• Vacancy: Policyholders should be aware of any vacancy clauses in their main policy, as extended vacancy of the rented premises might affect coverage.
• Full-time vs. Part-time Rental: The form generally provides coverage whether the property is rented on a full-time or part-time basis.

Key information for agents and underwriters

• Agents: Agents must diligently identify all rental properties owned by the insured to ensure they are properly scheduled on the DL 24 04. Failure to do so can result in a significant uninsured liability exposure for the client. Agents should also explain how the underlying policy's liability limits and conditions apply to these additional premises.
• Underwriters: Underwriters need to assess the increased liability exposure presented by each additional rented premises. Factors to consider include:
  • The number of family units at each location.
  • The condition and maintenance of the properties.
  • The presence of any specific hazards (e.g., swimming pools, trampolines, certain dog breeds) which might require separate underwriting or specific exclusions/endorsements.
  • The occupancy and tenant type.
  Pricing for this endorsement will reflect the additional risk assumed. Underwriters should also confirm that the underlying policy is appropriate for an insured with rental exposures.