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3. DP-04-73

Form DP 04 73 - Limited Theft Coverage

The DP 04 73 (Limited Theft Coverage) endorsement is designed to add a restricted level of theft protection for personal property to a Dwelling Property policy (DP 00 01, DP 00 02, or DP 00 03). Its primary function is to provide coverage against direct physical loss to personal property owned or used by the named insured, or owned by a residence employee while on the described location, caused by theft, including attempted theft, and vandalism or malicious mischief resulting from theft. Unlike the broader DP 04 72 (Broad Theft Coverage) endorsement, the DP 04 73 typically provides on-premises coverage only.

Classes of Business It Applies To

This endorsement is specifically tailored for situations where the broader theft coverage might not be applicable or desired. Key scenarios include:

• Non-Owner Occupied Dwellings: This is a primary use case. If a dwelling is rented out to tenants and not occupied by the owner, the DP 04 73 can provide theft coverage for the landlord's personal property on the premises. For example, if a landlord furnishes a rental property with appliances or other personal property, this endorsement could cover those items against theft.
• Apartments Occupied by Someone Other Than the Named Insured: If an apartment is occupied by a tenant who is not the named insured on the dwelling policy, this limited coverage can apply.
• Co-ops and Condominiums (Non-Owner Occupied): Similar to other non-owner occupied dwellings, if a co-op or condo unit is not occupied by the owner, this form can be used.
• Situations Where Only On-Premises Coverage is Needed: Even for an owner-occupant, if the primary concern is theft from the dwelling itself and not off-premises, this form might be considered, though the Broad Theft Coverage (DP 04 72) is generally more appropriate for owner-occupants desiring theft coverage.

Special Considerations

There are several important factors to consider when using the DP 04 73:

• On-Premises Only: A significant limitation is that coverage is typically restricted to the "described location" (the insured premises). Property stolen while away from the premises is generally not covered under this endorsement.
• No Coverage for Tenant's Property: This endorsement covers the personal property of the named insured (e.g., the landlord) or a residence employee. It does not cover personal property owned by a tenant, roomer, or boarder. Tenants would need their own renter's insurance policy (e.g., HO-4) for their belongings.
• Exclusion for Theft by Tenant: The form explicitly excludes loss caused by a tenant, roomer, boarder, members of their household, or their employees. This is a critical exclusion for landlords to understand.
• Vacancy Clause: Coverage for vandalism or malicious mischief as a result of theft may be voided if the dwelling has been vacant for more than 60 consecutive days immediately before the loss (though a dwelling under construction is not considered vacant).
• Special Limits of Liability: Like most theft coverages, the DP 04 73 contains special sub-limits for certain categories of high-value property. These limits are the maximum payable for all property in that category per loss and do not increase the overall on-premises limit. Examples of property subject to special limits often include:
  • Money, bank notes, bullion, coins.
  • Securities, accounts, deeds, manuscripts.
  • Watercraft (including trailers, furnishings, equipment, and outboard motors).
  • Trailers not used with watercraft.
  • Firearms and related equipment.
• Property Not Covered: Certain types of property are typically excluded, such as aircraft, motor vehicles (with some exceptions for service vehicles or those for the handicapped), credit cards, and business property.
• Minimum Limit: There is typically a minimum limit of liability that can be purchased, often around $1,000.
• Notification to Police: In the event of a theft loss, the insured is generally required to notify the police.

Key Information for Agents and Underwriters

• Risk Assessment: The primary risk is theft from the insured premises. For non-owner occupied dwellings, the character and stability of tenants can be a factor, though theft by tenants is excluded. Neighborhood crime rates, security measures (locks, alarms), and the type/value of personal property being insured are key underwriting considerations.
• Pricing: Pricing will depend on the limit of liability chosen, the property's location, any prior loss history, and the specific underwriting guidelines of the insurer.
• Coverage Gaps: Agents should clearly explain the limitations, especially the on-premises restriction and the exclusion of tenant's property and theft by tenants. This helps manage expectations and ensures the client understands what is and isn't covered. It's crucial to differentiate this from the DP 04 72 Broad Theft Coverage, which is more comprehensive and available for owner-occupied dwellings.
• Underwriting Guidelines: Insurers will have specific guidelines regarding eligibility, such as the type of dwelling and occupancy status. Some insurers may have maximum limits they are willing to offer under this endorsement. For example, the Wisconsin Insurance Plan specifies that the Limited Theft Endorsement is for non-owner-occupied properties with limits available at $3,000, $4,000, or $5,000.
• Comparison to DP 04 72: The DP 04 73 provides more restricted coverage than the DP 04 72. The Broad Theft Coverage (DP 04 72) is generally for owner-occupied dwellings, can offer off-premises coverage, and covers personal property of an "insured" (a broader definition including resident relatives and students away at school), whereas the DP 04 73 typically covers property owned or used by "you" (the named insured and resident spouse) and is on-premises only.
• Related Forms: This endorsement modifies the base Dwelling Property forms (DP 00 01, DP 00 02, DP 00 03). The choice of the base form will determine the underlying perils covered for the dwelling and other structures, while the DP 04 73 specifically adds theft coverage for personal property.