Which dwelling policy insures a structure on an actual cash value basis?

The DP-1 policy, or Dwelling Policy 1, is designed to cover risks on an actual cash value (ACV) basis. This means that when a covered loss occurs, the insurance payout will reflect the replacement cost of the damaged or destroyed property minus depreciation. This approach provides coverage for the dwelling itself against specific perils, such as fire, lightning, and explosion, which are outlined in the policy.

In contrast, the DP-2 and DP-3 policies offer broader coverage options, including replacement cost coverage under certain conditions. The DP-2 typically includes more named perils compared to the DP-1, while the DP-3 offers open peril coverage, which protects against all risks except those explicitly excluded. The DP-6, which is a newer form of coverage, also operates differently and is not typically associated with the basic actual cash value approach of the DP-1 policy.

Thus, the DP-1 policy specifically stands out as the option that provides coverage on an actual cash value basis, making it the correct answer to the question.