DP 2 broad form covers the dwelling on which basis of valuation?

The DP 2 broad form, commonly referred to as "broad form" dwelling policy, provides coverage on a replacement cost basis. This means that in the event of a covered loss, the insurance will pay for the repair or replacement of the dwelling without deducting for depreciation.

This approach is advantageous for homeowners because it ensures that they can restore their home to its original condition or replace it with a new item of like kind and quality, rather than being subjected to the reduced value of the home due to wear and tear over time. This policy is designed to provide more comprehensive coverage compared to policies that offer actual cash value, which would only pay for the depreciated value at the time of the loss. Thus, when a loss occurs, the replacement cost basis allows for potentially higher payouts to adequately cover the cost of rebuilding or repairing the property.