What type of coverage is typically included in a DP-1 policy?

A DP-1 policy, also known as a Dwelling Policy 1, provides basic coverage primarily for damage caused by specific perils, including fire. This type of policy is often referred to as "named peril" coverage, and it specifically lists the perils that are covered rather than providing comprehensive protection for all possible risks to the property.

The coverage in a DP-1 policy typically includes fire, lightning, and internal explosion, which clearly aligns with the first option regarding fire damage. This characteristic makes the DP-1 policy suitable for owners of dwellings who desire minimal coverage but still wish to protect against major threats.

Named peril coverage is not as extensive as all-risks or comprehensive coverage options, which include a wider range of potential losses. This distinction highlights the basic nature of DP-1 policies, affirming why fire is a central component of the coverage they provide.