Which dwelling policy form primarily insures structures on an actual cash value basis?

The dwelling policy form that primarily insures structures on an actual cash value basis is indeed the DP-1. This form, also known as the Basic Form, provides coverage for several named perils and settles claims on an actual cash value basis in the event of a loss. Actual cash value means that the insurer pays the replacement cost of the structure minus depreciation, which is a critical distinction for homeowners to understand since it can significantly affect the amount they receive in the event of a claim.

In contrast, the other dwelling policy forms—DP-2 and DP-3—offer broader and more comprehensive coverage options. DP-2, or the Broad Form, typically provides coverage on a replacement cost basis for certain structures, while DP-3, known as the Special Form, generally offers open peril coverage and also settles claims on a replacement cost basis. Therefore, those forms are designed to provide more extensive protection compared to DP-1, making DP-1 the only form that specifically utilizes actual cash value as the settlement method for structure coverage.