1. Forms
2. DP
3. DP-01-04

What the form is

The DP 01 04 Special Provisions - California endorsement is a mandatory state-specific form used with dwelling property policies in California. Its primary purpose is to amend the terms and conditions of a standard dwelling policy (like the DP 00 01 or DP 00 03) to comply with California's unique insurance laws, regulations, and judicial precedents. This ensures that the policy language and coverage align with state-specific requirements that may differ from national or other states' standards.

Classes of business it applies to

This endorsement applies to personal dwelling property insurance in California. This includes various occupancy types such as:

• Landlord Dwellings: Properties rented out to tenants. For example, an individual owning a single-family home or a duplex and renting it out would likely have this endorsement on their dwelling policy.
• Seasonal Dwellings: Homes that are not occupied year-round, such as vacation homes.
• Vacant Dwellings: Properties that are currently unoccupied.
• Owner-Occupied Dwellings (less common for DP, but possible): While homeowners policies (like HO-3) are more common for owner-occupied primary residences, dwelling policies can sometimes be used, and this endorsement would apply if a DP form is used in California.

Special considerations

Several important considerations apply when using the DP 01 04:

• Mandatory Nature: For insurers using ISO-based dwelling property programs in California, this endorsement is typically mandatory to ensure compliance.
• Response to Legislation and Court Rulings: Editions of this form are often updated to reflect new California laws or significant court decisions impacting insurance coverage. For instance, past revisions have addressed non-renewal conditions mandated by California Senate Bills and clarifications on the definition of "actual cash value" following specific court cases.
• Impact on Policy Language: The endorsement can modify various sections of the policy, including definitions, conditions, and exclusions, to align with California requirements. Agents and insureds should review it carefully to understand how it affects the overall coverage.
• Terrorism Coverage Disclosure: While not always part of the DP 01 04 itself, related notices like the "TRIA DP 01/04 Terrorism Coverage Disclosure Notice" might be issued in conjunction, especially in specific markets like the Massachusetts Property Insurance Underwriting Association (though the DP 01 04 itself is California-specific). This highlights the importance of state-specific handling of even federal programs.

Key information for agents and underwriters

• Compliance is Key: Agents must ensure this endorsement is included when writing applicable California dwelling policies to maintain compliance and avoid potential errors and omissions issues.
• Understand State-Specific Nuances: Underwriters need to be thoroughly familiar with the provisions of this endorsement and how they interact with the base policy, particularly concerning California's unique consumer protection laws and claims handling requirements.
• Edition Dates Matter: Due to frequent updates in response to legal and regulatory changes, using the correct and most current edition date of the DP 01 04 is crucial.
• Risk Assessment: While the endorsement itself is a compliance tool, the underlying risks associated with California properties (e.g., earthquake, wildfire, specific liability concerns) must still be carefully underwritten. This form ensures the policy contract is sound from a regulatory standpoint within California.
• Program Variations: Different insurers might have their own specific dwelling programs filed in California. While many will use ISO-based forms like the DP 01 04, some may have proprietary forms or variations. It's important to refer to the specific insurer's filed program.