DP-3 Insurance is Best Suited for Rental Properties
The DP 3 insurance is best suited for rental properties or non-owner occupied homes. In the past, many insurance companies used various DP products (like the DP-3) to insure owner-occupied homes. In more recent years, the DP3 policy and other similar insurance policies have been used primarily to insure rentals, while HO products (like the HO3 and the HO5) have been used primarily to insure owner-occupied homes.
Although most homeowners are not restricted from purchasing a DP-3 policy to insure their homes, this is generally discouraged because not only is the coverage less comprehensive with fewer endorsements than its HO counterpart, the HO-3, but also it usually not less expensive.
DP3 Insurance is All Risk Insurance
Dwelling fire insurance policies come in two different policy categories; named peril policies and open peril policies. The DP 1 and DP 2 are named peril policies, while the DP 3 is an open peril policy. Named peril insurance policies are policies that specifically list the perils that are insured under the policy. Open peril policies cover a broad range of perils that are not specifically excluded from the policy.
Exclusions of the DP3 Insurance Policy
As mentioned above, the DP-3 insures all perils except for those specifically excluded from the policy. The following perils are the most common perils that are excluded from DP-3 insurance coverage:
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