What perils does a DP3 cover?

An DP3 policy is an open perils policy. That means it covers the property for all damage except those listed as exclusions in the policy.

What kind of coverage does DP3 provide?

DP3 policies can cover the structure of the property, other structures, personal property (like appliances), loss of rental income, personal liability, and medical expenses.

What is the difference between HO3 and DP3?

HO3 policies cover homes that are used as the owner's primary residence. DP3 policies are more customizable and can cover homes with unique needs, like homes used as rental properties.

DP3 policy

Q: What is a DP3 policy?

A DP3 policy is a dwelling property insurance policy for rented residential homes and homes with older roofs. A DP3 can protect the home, belongings, and more.

A type of dwelling property insurance policy designed for homes used as investment properties or homes with older roofs, typically offering many of the same coverages found in a standard homeowners insurance policy while also being highly customizable to fit unique needs

bright brick townhomes with nicely manicured landscaping

What is a DP3 policy?

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.

What do DP3 policies cover?

Dwelling property insurance policies typically cover the physical structure, but you can usually add endorsements to a DP3 to cover:

Damage to your personal property, like appliances in the home.
Your personal liability. (Our DP3 policies include personal liability coverage.)
Medical payments for injured visitors.

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:

Ordinance or law.
Earth movement.
Water damage.
Power failure.
Neglect.
War.
Nuclear hazard.
Intentional loss.
Governmental action.
Mold.

How do I know if I need a DP3 policy?

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:

Is my roof 10 years old or older? For this one, it doesn’t matter whether or not you rent your home. An older roof can make you ineligible for coverage for many insurance companies.
What risks does this property face? DP3 is the only dwelling property policy written on an open perils basis. It provides broader coverage than DP1 or DP2.
How important is my rental income to me? If rent is a major portion of your income, then loss of rent coverage is essential to your recovery, too.
Can I afford to repair damage to this property? Getting the full replacement cost value of your property can help you recover quickly, but only if you can get insurance in the first place.

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.