If an insured's home collapses due to volcanic eruption under a DP-2 policy, what will happen to the claim?

In the context of a DP-2 policy, volcanic eruptions are not considered a covered peril. The DP-2 policy, or the Broad Form Dwelling policy, provides coverage for specific named perils, but there are certain natural disasters, such as volcanic eruptions, that typically fall outside of this coverage.

In this scenario, if an insured's home collapses due to a volcanic eruption, the claim would be denied. This reflects the understanding that the policy specifically outlines the events and situations in which the insurance company will provide compensation. Given that volcanic eruptions are generally not included among the covered perils of a DP-2 policy, the result is that the insured would not receive any benefits from the insurance for the damage caused by this event.

This delineation of risks is important for policyholders to understand, as it highlights the specific events that their insurance covers and underscores the necessity of knowing the exclusions that accompany their coverage.