Glossary
DP-3 policy, defined
The dwelling fire form most often used to insure a house that the owner rents to tenants rather than lives in. It covers the structure on an open-peril basis, usually at replacement cost, with optional contents, loss of rents and premises liability added by endorsement.
In practice
Landlords reach for it because a standard homeowners form excludes or limits coverage once the named insured no longer occupies the house. The base form is narrower than a homeowners policy in ways that matter: no theft coverage for the landlord's contents unless added, no coverage for the tenant's belongings at all, and liability only if the endorsement is attached. Fair rental value coverage replaces lost rent while a covered loss makes the unit unlivable, and it is worth setting at a full year of rent. A vacancy clause suspends some coverages if the house sits empty beyond a set period, so a landlord between tenants should tell the carrier. Tenants should carry their own renters policy; the landlord's form will not pay for their things.
A worked example
Suppose a landlord insures a rental house on this form with a $300,000 dwelling limit, $10,000 of landlord contents for the appliances, and fair rental value. A dryer fire causes $40,000 of damage and the tenant has to move out for three months while the rent was $1,800 a month. The policy pays the $40,000 repair less the deductible plus $5,400 of lost rent. The tenant's ruined furniture is not covered here; that is a renters claim. Hypothetical figures.
Applies to: Landlord / Rental Property InsuranceRenters Insurance