Your home and things · DP-1, DP-2, DP-3
Landlord insurance
Insures a house or unit you rent out: the building and the rent you lose after damage. It doesn't cover your tenant's belongings.
- Who it's for
- Owners of a home they rent to others. Also used for vacant homes and some second homes. The forms are called dwelling policies, DP-1, DP-2 and DP-3.
- Is it required?
- Not by law. A mortgage lender will require it. A regular homeowners policy usually stops covering the house once you move out and rent it.
Covered and not covered
Usually covered
- The building, from the causes your form covers. DP-3 covers any cause not excluded.
- Rent you lose while the home is unlivable after covered damage (fair rental value)
- Your own things kept there for the tenants, like appliances or a lawn mower
- Liability, if you add it, for injuries caused by the property, like a broken stair
Usually not covered
- Your tenant's belongings and liability. Tenants need their own renters insurance.
- Flood and earthquake
- Damage from wear and tear, or poor maintenance
- Unpaid rent when a tenant simply stops paying, unless you add rent guarantee coverage
- Vandalism and some water damage once the home has been vacant for about 60 days in a row
- Short-term rentals like Airbnb, unless the policy says it covers them
Real-life examples
A kitchen fire forces your tenants out for two months.
Usually coveredThe policy pays to repair the house and the rent you lose while it's being fixed. The tenants' belongings and hotel are for their renters insurance.
A tenant's guest falls on a loose stair and sues you.
It dependsCovered only if you added liability to the policy. Dwelling policies don't always include it, so check. It's often called "Coverage L".
The house sits empty for three months between tenants and is vandalized.
Usually not coveredAfter about 60 days of vacancy, most policies stop covering vandalism and glass breakage. Tell your insurer before a long vacancy; a vacancy endorsement can keep you covered.
What's inside a dwelling (DP) policy
The letters look like a homeowners policy, but D and E mean different things, and liability is added separately.
ADwellingThe rental building
The structure and what's built into it.
BOther structuresGarage, shed, fence
Detached structures on the property.
CPersonal propertyYour things at the rental
Items you own and keep there for the tenants, like appliances or furniture in a furnished rental. Optional in many policies.
DFair rental valueRent you lose
The rent you lose while the unit is unlivable after covered damage.
Example: Rent is $2,000 a month and repairs take three months: the policy pays up to $6,000.
EAdditional living expenseIf you live there yourself
Only matters if you live in part of the building, like the other half of a duplex.
L & MLiability and medical paymentsOften an add-on
Claims when someone is hurt because of the property. Not part of every dwelling policy; you may need to add it or buy a separate liability policy.
DP-1, DP-2 and DP-3
| Form | Covered causes | How claims are paid |
|---|---|---|
| DP-1 (basic) | A short list: fire, lightning and internal explosion. Wind, hail and a few others are often added. | Usually actual cash value |
| DP-2 (broad) | A longer named-peril list, similar to HO-2 | Usually replacement cost for the building |
| DP-3 (special) | Open perils for the building: any cause not excluded | Usually replacement cost for the building |
DP-3 is the most common choice for rented homes. DP-1 is cheaper, and often used for vacant or older homes.
Check your own policy
Find these on your policy or declarations page, or ask your agent:
- Which DP form you have
- Whether liability (L and M) is included, and its limit
- How long the home can sit vacant before coverage shrinks
- Whether short-term or furnished rentals are allowed
- That your lease requires tenants to carry renters insurance
Not sure where to look? See how to read your policy.