What’s the difference between DP3 and HO3?

Both DP3 and HO3 can cover your dwelling and other structures on your property. However, a DP3 can cover some risks an HO3 policy can’t.

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Much like an HO3 policy, a DP3 policy, also called dwelling property insurance, covers your home and other structures on your property. But these policies have some important differences that make them more appropriate for certain situations. Let’s take a look at each option in more detail and see how they compare.

DP3 vs. HO3: How the coverages compare

At first glance, you’ll see more similarities than differences between the DP3 and HO3. Both are designed to cover homes and other structures on an open perils basis. That means the structures are protected for all sources of damage except the few the policy lists as exclusions.

Both policies can also offer the following:

Some coverages come standard with the HO3 that you can add on to the DP3, and the DP3 can cover some risks an HO3 can’t. The chart below shows how that works.

DP3 vs. HO3: Coverage details

Coverage A (Dwelling) Open perils Open perils
Coverage B (Other structures) Included Included
Coverage C (Personal property) Included Included
Coverage D (Loss of use) Included Included
Coverage D (Fair rental value) Included Not included
Coverage E (Personal liability) Optional Included
Coverage F (Medical payments) Optional Included
Roof Surfacing Payment Schedule Included Optional

You’ll notice the biggest difference in DP3 vs. HO3 is that some coverages are added by default and others are optional.

The second biggest difference is DP3’s inclusion of the Roof Surfacing Payment Schedule endorsement, which covers the roof for its actual cash value coverage only when it’s damaged by wind or hail. For all other covered sources of damage, the roof and the rest of the home’s structure are insured for their replacement cost. This endorsement comes with a sizable premium discount.

Coverage D is also interesting in the case of DP3. If the home you’re insuring is a rental property, then Coverage D can have fair rental value coverage to make up for lost rent when a covered claim makes it uninhabitable. Coverage D in an HO3 policy usually only covers additional living expenses when a covered claim keeps you from living in a home that is your primary residence.

Who needs a DP3 vs. HO3?

So now that you know the similarities and differences between DP3 and HO3, how do you know which is right for you?

The answer really depends on your situation.

The DP3 policy is often a good option for homeowners with unique coverage needs. For example, it can be tricky to find insurance if you rent out your home on Airbnb, but a DP3 can often cover that use. And because of the Roof Surfacing Payment Schedule endorsement, homes with older roofs are also usually a good fit for a DP3. This makes the premium more affordable and eliminates the need to find coverage through a state-run program.

These are usually the most common reasons for choosing a DP3 policy:

  • You inherited the property and it’s sitting vacant while you work on selling it.
  • You’ve moved out of a home you’re selling, and you need it insured in the meantime.
  • You own an investment property that you rent out short or long term.
  • Your home has a roof that’s 10 years or older.

An HO3 policy is a good balance of coverage and affordability to protect your primary residence. You might opt for this policy if:

  • You live in the home year round.
  • You don’t rent out your home.
  • Your roof is brand new.

If you need help figuring out which policy makes sense for your needs, just give us a call!

Getting a DP3 vs. HO3 quote

Whether you want an HO3 or DP3 policy, getting a quote is as easy as entering your address and answering a few quick questions about your property. And if you need any help along the way, our experts are standing by.


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