Which dwelling form pays losses to dwellings and other structures on an actual cash value basis?

The dwelling form that pays losses to dwellings and other structures on an actual cash value basis is the DP-1. The Actual Cash Value (ACV) method considers the replacement cost of the property minus depreciation, meaning that the policyholder receives compensation based on the current value of the property, rather than what it would cost to replace it with a new one.

The DP-1, or Dwelling Property Basic Form, is typically the simplest and most basic of the dwelling forms offered. It primarily covers the structure itself, as well as other structures on the property, but does so on an ACV basis, which can lead to a lower payout in the event of a loss compared to forms that offer replacement cost coverage.

In contrast, the DP-2 and DP-3 forms provide broader coverage options and may offer replacement cost coverage for the structures involved, which means they would cover the cost to replace the dwelling or other structures without factoring in depreciation. The DP-4 is less common and typically associated with mobile homes. The key characteristic of the DP-1 form distinguishes it as the only option among these alternatives that uses the actual cash value method for settlement of claims.

Thus, the DP-1 specifically addresses this need for ACV in