What’s the difference between DP3 and HO3?

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

DP3 vs. HO3: How the coverages compare

At first glance, the DP3 and HO3 seem more similar than different. Both are designed to cover homes and other structures on an open-peril basis. That means the structures are protected from all sources of damage except the few the policy lists as not covered perils or exclusions.

Both policies can also offer the following coverage parts.

• Coverage A: Coverage for the structure of the home

• Coverage B: Coverage for other structures on the property

• Coverage C: Coverage for personal belongings

• Coverage D: Coverage for loss of use and fair rental value

• Coverage E: Coverage for personal liability

• Coverage F: Coverage for medical payments to injured guests

The coverage available on HO3 and DP3 policies is similar. However, the specifics of who and what are covered are different, The chart below shows how that works. 

DP3 vs. HO3 coverage details

The biggest difference between DP3 and HO3 is the type of risk each covers. DP3 policies are most commonly for properties the owner rents to others. An HO3 policy is for owner-occupied homes. Notice, too, that some coverages are added by default, while others are optional. 

The second biggest difference is DP3’s inclusion of the roof surfacing payment schedule (RSPS) endorsement. This endorsement is mandatory for homes with roofs that are more than 10 years old, but it’s optional for newer roofs.

An RSPS endorsement changes the basis for claim settlements to a payment schedule based on your roof’s age and surface materials that only applies to wind or hail damage. For all other covered sources of damage, the roof and the rest of the home’s structure are insured for their replacement cost.

Coverage D is also interesting in the case of DP3. If the home you’re insuring is a rental property, Coverage D can have fair rental value coverage to compensate for lost rent when a covered claim makes it uninhabitable. In an HO3 policy, Coverage D can usually cover fair rental value and your 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?

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

The answer depends on your situation.

The DP3 policy is often a good option for people with rental properties. For example, it can be tricky to find insurance if you rent out your home on Airbnb, but a DP3 can often cover that situation. And because of the inclusion of the RSPS endorsement, homes with older roofs may be eligible for a DP3 as well. The RSPS makes the premium more affordable and may eliminate the need to find coverage through a state-run program.

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

• 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. 

• You don’t rent out your home.

• Your roof is brand new or has more than five years of useful life.

Getting a DP3 or an HO3 quote

Whether you want an HO3 or DP3 policy in Florida, 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.