A DP3 policy is dwelling property insurance that’s customized to fit homes with older roofs or homes used as investment properties. Many insurers don’t cover homes with roofs older than 10 years in coastal states or homes used for short or long-term rentals.
Because this policy includes the Roof Surfacing Payment Schedule endorsement, it offers homeowners a major discount on their premium. This endorsement 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.
Homeowners can also modify a DP3 policy by opting out of personal property coverage and adding fair rental income protection. These make DP3 a good choice when you’re renting your home to others.
Dwelling property insurance policies typically cover the physical structure, but you can usually add endorsements to a DP3 to cover:
DP3 policies are the most popular kind of dwelling property insurance, perhaps because they are written on an open perils basis. This means damage is covered unless it’s caused by an event listed in the policy. Some of the most commonly excluded perils are:
The most common reason homeowners buy a DP3 policy is because they’ve decided to rent out either their entire house or a portion of it and aren’t going to continue living there. But people often get dwelling property insurance if they have an older roof that’s made it difficult to insure their home.
Here are a few good questions to ask before you decide on a DP3 policy:
Worth noting: While there are a lot of similarities between an HO3 policy and a DP3, a DP3 can cover some risks a standard HO3 can’t. Learn about the difference between DP3 and HO3.
We can help you decide the appropriate amount of risk to retain within your budget.
Dwelling property insurance may be appropriate for non-owner occupied homes, including:
When in doubt, tell your insurance company how you use your home. They can help you find the appropriate policy.
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