Under which dwelling form is coverage for improvements, alterations, and additions included in the limit of insurance?

The correct answer is the dwelling policy form that includes coverage for improvements, alterations, and additions as part of the insurance limit. In the DP-1 form—also known as the basic dwelling policy—coverage is generally limited and does not automatically include improvements and alterations.

On the other hand, DP-2 and DP-3 forms, which are more comprehensive, do provide broader coverage options. DP-2 includes coverage for some additional structures and improves upon DP-1’s limitations, while DP-3 offers the most extensive coverage of the dwelling and personal contents on an open peril basis. However, in these forms, coverage for improvements, alterations, and additions is typically provided in addition to the base limit rather than being included within it.

In summary, it's important to recognize that while the DP-1 provides limited coverage, the subsequent forms expand coverage significantly, making the distinction key in understanding how different dwelling forms operate in regards to improvements, alterations, and additions.