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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A DP-3 form insurance policy is a type of dwelling fire insurance for rental properties and residential dwellings not occupied by the owners as their primary residence. Also known as the special form, DP-3 insurance is the broadest kind of dwelling fire insurance. It’s ideal for landlords and property owners who want thorough protection for their rental properties.
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What a DP-3 form policy covers
DP-3 insurance is an open perils policy, meaning that it covers every potential risk of loss unless the policy explicitly excludes it. If your policy form doesn’t exclude a peril, then it’s a covered peril.[1]
Here’s some of what a standard DP-3 policy covers:
Fire and lightning
Windstorms
Explosions
Hail
Riots or civil commotions
Smoke
Aircraft-related damage
Vehicle-related damage
Volcanic eruption
Falling objects
Freezing
Weight of ice and snow
Theft
Vandalism
Accidental damage
Personal liability
Loss of use (loss of rent)
It’s also a replacement cost value policy, meaning that it replaces any damaged or destroyed items at the cost it takes to replace them with materials of a similar quality. It also doesn’t deduct for depreciation, as actual cash value policies do. This means property owners can fully restore their properties to pre-loss conditions without significant financial losses.
What a DP-3 form policy doesn’t cover
While a DP-3 form policy is the most comprehensive dwelling fire policy, it doesn’t cover everything.
Here’s what a standard DP-3 policy won’t cover:
Flood and water damage
Earthquakes
Pest infestation
Intentional loss
Acts of war
Neglect
Mold
Nuclear hazards
Government action
Power failure
Good to Know
You can purchase extra coverage for an additional cost if your property is at risk for some of these hazards. Many insurance companies offer separate flood and earthquake policies.
Who needs a DP-3 insurance policy?
DP-3 insurance is for landlords and property owners who rent out their properties, including seasonal properties, vacation homes, and short-term rentals.[2] It’s the most comprehensive policy of the dwelling fire insurance policies available for rentals, so it’s ideal for homeowners with properties at higher risk for numerous types of property damage. It also offers personal liability coverage in many cases.
While it’s a good idea to have a DP-3 policy as a rental property owner, states don’t legally require it. But many lenders will require property owners to have some form of dwelling fire insurance, whether it be a DP-1, DP-2, or DP-3 policy. Standard home insurance won’t cover a vacant home, so you’ll need a dwelling fire insurance policy if you have a vacant home.
DP-3 vs. HO-3: What’s the difference?
An HO-3 policy is a standard form of homeowners insurance that provides coverage for homes that the owners live in. Like DP-3 insurance, it covers properties on an open perils basis. The main difference between a DP-3 and HO-3 policy is the type of property they cover. HO-3 homeowners policies are for homes used as primary residences.
A DP-3 policy is for landlords and property owners looking to protect rental properties or non-owner-occupied homes. Another major difference between the two is that HO-3 policies tend to offer more comprehensive personal property coverage than DP-3 policies, which primarily protect the structure itself.[3]
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Other types of dwelling fire policies
The two other types of dwelling fire policies available are DP-1 and DP-2 forms, which have some significant differences. Both forms offer less comprehensive coverage than DP-3 policies, but they’re cheaper and can provide the right amount of coverage for certain property owners.[1]
Here’s how these different types of coverage vary from DP-3 insurance.
DP-1 policy
The DP-1 form, also known as the basic form, is the most limited type of dwelling fire insurance. It’s a named peril policy, meaning it only provides coverage for certain named perils listed in the policy, unlike the DP-3 form. Also unlike the DP-3 form, the policy pays out on an actual cash value basis. This means that your insurer will only reimburse your damages for their current depreciated cash value.
Here’s what a typical DP-1 policy covers:
Fire and lightning
Windstorms
Explosions
Hail
Riots or civil commotions
Smoke
Aircraft-related damage
Vehicle-related damage
Volcanic eruption
DP-2 policy
The DP-2 form, also known as the broad form, offers a level of coverage between the DP-1 and DP-3 forms. It’s a more comprehensive policy than the DP-1, but less comprehensive than the DP-3. Like the DP-1 form, DP-2 insurance offers coverage on a named peril basis, though it offers more coverage than the DP-1 policy. Like the DP-3 form, the DP-2 form pays out claims on a replacement-cost-value basis.
Here’s what a typical DP-2 policy covers:
Fire and lightning
Windstorms
Explosions
Hail
Riots or civil commotions
Smoke
Aircraft-related damage
Vehicle-related damage
Volcanic eruption
Falling objects
Freezing
Weight of ice and snow
DP-3 form FAQs
The following information can help you learn more about DP-3 form insurance to find the best option for your property and specific needs.
What is a DP-3 form?
A DP-3 form is a dwelling fire insurance policy for rental properties or homes occupied by someone other than the owners. It’s the most comprehensive type of dwelling fire insurance.
What does a DP-3 form cover?
A DP-3 form covers damages from fire and lightning, windstorms, explosions, hail, riots or civil commotions, smoke, aircraft-related damage, vehicle-related damage, volcanic eruption, falling objects, freezing, the weight of ice and snow, theft, vandalism, accidental damage, personal liability, and loss of use (loss of rental income).
Where can you get a DP-3 form policy?
You can get a DP-3 form policy from most major insurance companies. Look online or talk with an insurance agent to find companies that offer DP-3 insurance. Before buying a policy, make sure to compare quotes and policies from multiple insurers.
What does DP-3 mean?
DP-3 stands for dwelling fire form 3. It’s the most comprehensive type of coverage for rental and investment properties, covering risks on an open perils basis. It offers much more comprehensive protection than DP-1 and DP-2 policies.
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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