DP3 policy is a property insurance policy for rented residential homes. A DP3 can protect both the home and its landlord furnishings.
A homeowner who rents out their property and does not live in it faces different risks than other homeowners. The insurance industry created a set of policies called dwelling fire insurance to address these risks. DP3 is one of these policies.
Dwelling fire insurance, including the DP3 policy, typically covers the physical structure of your home. Your DP3 policy can be endorsed to cover:
DP3 policies are the most popular kind of dwelling fire insurance, perhaps because they are written on an open-perils basis. This means damage is covered unless it is caused by an event listed in the policy. Some of the most commonly excluded perils are:
Another reason DP3 policies are popular is because they often include loss of rent coverage. This coverage can compensate you for lost rental income if damage to your rental property makes it unlivable. For example, say a windstorm tears the roof off of a home you rent, and your tenants have to find temporary housing. That lost income may be covered by a DP3 policy while repairs are made.
DP3 policies are frequently written on a replacement-value basis. This means your insurance company can pay the full cost of replacing your property up to your policy limits rather than subtracting for depreciation.
First, ask yourself three questions:
Answering yes to all three questions is a good indication that dwelling fire insurance is the right fit for your situation. After that, you may also want to ask yourself:
We can help you decide the appropriate amount of risk to retain within your budget.
While dwelling fire insurance is for non-owner occupied homes, some programs do not allow homes that sit vacant for a long time, like:
Tell your insurance company what you use your home for so they can help you find the appropriate home insurance.