Final answer:
A Special Form (DP-3) Dwelling Policy pays out when the dwelling is damaged or burglarized. It is an open perils policy for the dwelling, providing broader coverage than DP-1 and DP-2 forms, but does not cover medical expenses, policyholder's death, or auto-related incidents which are covered by their respective insurance policies.
Step-by-step explanation:
The true statement concerning a Special Form (DP-3) Dwelling Policy is that it pays out when the dwelling is damaged or burglarized. The DP-3 policy is known as an "open perils" policy for the dwelling, meaning it covers all perils except those expressly excluded in the policy.
This form is more comprehensive compared to the DP-1 (Basic Form) and DP-2 (Broad Form), which list specific perils that are covered. A DP-3 policy generally does not pay out for medical expenses or the policyholder's death, as these are typically covered under health and life insurance policies, respectively.
Additionally, coverage for when a 'car is damaged, stolen, or causes damage to others' falls under auto insurance, not a dwelling policy.