Key Takeaways
- DP-1, DP-2, and DP-3 are the three dwelling fire forms landlord policies are written on — think basic, better, best.
- The two levers that matter: which perils are covered (named vs open) and how losses are paid (depreciated cash value vs replacement cost).
- DP-3 is the default recommendation for most modern, well-kept rentals — broadest coverage, usually replacement cost.
- DP-1 has a real job: older or lower-value properties where replacement-cost coverage isn’t available or economical.
When you buy landlord insurance, the quote is built on one of three standardized “dwelling fire” forms: DP-1, DP-2, or DP-3. Two policies can look identical on a quote sheet — same house, same limit, similar premium — and pay out thousands of dollars apart on the same claim, purely because of the form. Here’s the difference in plain English.
The comparison
| Feature | DP-1 (Basic) | DP-2 (Broad) | DP-3 (Special) |
|---|---|---|---|
| How perils work | Short named list | Longer named list | Open peril — everything except exclusions |
| Typical perils | Fire, lightning, internal explosion; wind/hail often optional | Adds wind, hail, burglary damage, falling objects, weight of ice, some water damage | All sudden, accidental losses unless specifically excluded |
| Settlement | Usually actual cash value (depreciated) | Often replacement cost | Usually replacement cost on the dwelling |
| Price | Lowest | Middle | Highest (often barely above DP-2) |
| Fits | Older / lower-value properties | Mid-tier rentals | Most modern, maintained rentals |
Named perils vs open perils — the burden of proof flips
On DP-1 and DP-2, a loss is covered only if it’s on the list — and practically, you are the one showing the claim fits a named peril. On DP-3, everything is covered unless it’s specifically excluded — so the carrier carries the burden of pointing to an exclusion. When a weird loss happens (and rentals specialize in weird losses), that reversal is worth real money.
Cash value vs replacement cost — the roof example
Actual cash value means depreciated value. A hailstorm totals a 15-year-old roof that costs $18,000 to replace: an ACV settlement might pay $7,000–$9,000 after depreciation; replacement cost pays the roof. That single scenario is why the DP-1-to-DP-3 premium gap — often a few hundred dollars a year — is one of the easiest value calls in landlord insurance.
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Which form should your rental be on?
- Modern single-family or small multifamily, maintained: DP-3. Done.
- Solid older property with updates (roof, electric, plumbing, HVAC): DP-3 if it qualifies, DP-2 as fallback.
- Older property, limited updates, lower value: DP-1 or DP-2 — honest coverage at an honest price while you renovate toward better.
- Short-term rentals: the form matters less than the STR-specific coverage — start here instead.
Whatever the form, confirm loss of rents is attached — it’s the coverage you’ll actually feel after a loss.
DP form FAQ
Is DP-3 worth the extra premium over DP-1?
What perils does DP-3 exclude?
Can I get replacement cost on a DP-2?
My property is older — am I stuck with DP-1?
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