As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.
3+ years experience in insurance and personal finance editing
NPN: 20564519
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
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DP-1 insurance — also called Dwelling Fire Form 1 insurance — is a type of policy for vacant homes, investment properties, and rental properties.
Landlords and property owners often buy these home insurance policies to cover properties they own that they know will be vacant for extended periods of time. It offers protection for properties not covered by standard home insurance.
Here’s what you need to know about DP-1 insurance policies.
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Who needs a DP-1 insurance policy?
Landlords, property owners, and investors are the primary people who need a DP-1 insurance policy. DP-1 insurance is useful for vacant homes, rental properties, and properties under construction.
Standard homeowners insurance typically won’t cover vacant homes, so DP-1 policies provide protection for properties that’d otherwise be uninsured.[1]
No state in the U.S. legally requires DP-1 insurance, but many lenders will require it to protect their investments. If you don’t have insurance for your property, it’s at risk for expensive damages from various perils. Though having DP-1 insurance isn’t a legal requirement, it’s a good idea to have it for a vacant property.
What a DP-1 policy covers
DP-1 insurance is a named perils insurance policy, which means it only covers the perils covered in the insurance contract. A standard DP-1 policy covers the following nine common perils:[2]
Fire and lightning
Windstorms
Explosions
Hail
Riots or civil commotions
Smoke
Aircraft-related damage
Vehicle-related damage
Volcanic eruption
DP-1 insurance operates on an actual cash value basis, meaning that if a named peril damages the vacant property, your insurer will pay out based on the current value of the damaged items. This differs from a replacement cost policy, in which an insurer will pay out the cost to replace the damaged items with new versions.
For Example
If you have a 15-year-old roof with a 30-year life expectancy that incurs severe damage from a windstorm, your insurer will only cover the value of the roof’s remaining life span — not the cost to fully replace your roof with a new roof.
What a DP-1 policy doesn’t cover
DP-1 insurance doesn’t cover everything, unfortunately. Here’s what your DP-1 policy won’t cover:
Water damage
Theft or burglary
Falling objects
Earthquakes
Wear and tear
Intentional damage
Weight of snow or ice
Freezing damage
Liability coverage
Though DP-1 insurance only covers named perils, different types of dwelling insurance policies offer more thorough protection.
A DP-1 policy is the most basic form of dwelling fire policy. DP-2 and DP-3 policies provide more thorough protection, offering coverage for everything included in a DP-1 policy and more.
DP-2 policy
DP-2 insurance covers every named peril covered by DP-1 insurance, as well as perils like falling objects, freezing, and the weight of ice or snow. Most DP-2 policies also provide replacement cost coverage, which covers the cost of replacing your damaged items with new versions, unlike actual cash value coverage.
DP-2 insurance is also a named peril policy, so it only protects against the exact covered perils listed in the insurance contract and has some exclusions.
DP-3 policy
DP-3 insurance is the most comprehensive dwelling fire policy by far. It’s an open peril policy that provides replacement cost coverage, meaning it covers any peril unless your policy explicitly excludes it.
DP-3 insurance is the only dwelling fire policy that covers things like theft, vandalism, and accidental damage. It’s the best option for landlords and property owners who want extremely thorough insurance coverage or have homes in high-risk areas.[3]
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How to get a DP-1 policy
If you’re in the market for a DP-1 policy, you should first determine whether it’s the right type of home insurance coverage for your property. DP-1 insurance is best for vacant homes, rental homes, vacation homes, and homes under construction.
If it’s the right coverage for your property, start researching insurance companies. Before buying a policy, make sure to compare quotes from at least three insurers.
Once you’ve found an insurance company and DP-1 policy you like, be sure to review the coverage details thoroughly to make sure it covers any potential peril your property might be at risk for. Once you’re comfortable it’s the right policy, go ahead and apply for the coverage. If the insurer approves your coverage, review the policy again, sign it, and begin paying your premiums.
DP-1 policy FAQs
The following information can help answer your remaining questions about DP-1 insurance and finding the best policy for your property.
What does DP-1 mean?
DP-1 stands for Dwelling Fire Form 1. It’s a basic form of insurance meant for vacant or rental properties. DP-1 insurance provides basic coverage against perils like fire and lightning, but it’s not as comprehensive as DP-2 or DP-3 insurance.
What’s the difference between a DP-1 and HO-3 policy?
The main difference between a DP-1 and HO-3 policy is the type of coverage. DP-1 insurance offers named peril coverage, while HO-3 insurance offers open peril coverage. DP-1 policies are best for vacant properties, while HO-3 policies are best for homeowners looking to protect their homes.
What does a DP-1 policy cover?
A DP-1 policy covers nine specific perils: fire and lightning, windstorms, explosions, hail, riots or civil commotions, smoke, aircraft-related damage, vehicle-related damage, and volcanic eruption.
Can you buy a DP-1 policy for the home you live in?
You shouldn’t buy a DP-1 policy for the home you live in. DP-1 insurance is for vacant properties — it’s ideal for landlords.
You should purchase a standard homeowners policy for your primary residence, such as an HO-3 policy. This type of home insurance policy protects your personal property and provides liability coverage, among other protections.
Danny is a Brooklyn-based writer with a producer’s license for property and casualty insurance. A former editor at Insurify, he specializes in auto, home, and pet insurance. He works to translate his insurance expertise into digestible, easy-to-understand content for drivers, homeowners, and pet owners alike.
Danny has been a contributor at Insurify since March 2022.
3+ years experience in insurance and personal finance editing
NPN: 20564519
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
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