Dwelling policies (DP) are a specific type of policy designed to provide the coverage usually needed for non-owner occupied rental properties, seasonal homes, and other similar investments.  While they vary some from state to state, they generally have the same common characteristics.

DP 1 (Form 1) – This is the most basic of all dwelling policies.  It is a ‘named-perils’ policy which provides basic coverage on the dwelling and personal property (if needed).  Water damage coverage is not normally available.  Payments for losses are the actual depreciated value at the time of loss (Actual Cash Value or ACV). Depending upon the guidelines of the company issuing the policy, liability protection and vandalism coverage may or may not be added as an endorsement for an additional premium.  DP-1 policies are used for vacant property or properties which are actively for sale.

Perils insured against are as follows:

• Fire or Lightning
• Windstorm, Hurricane & Hail
• Explosion
• Damage by Aircraft and Vehicles
• Sudden & Accidental Damage from Smoke
• Riot or Civil Commotion
• Vandalism or Malicious Mischief (may sometimes be added as an endorsement)

DP 2 (Form 2) – More expensive than a DP-1, this policy form provides coverage on a ‘broad named perils’ basis for dwellings and personal property. Payments are also limited to actual depreciated value at the time of the loss but replacement cost coverage may be purchased for additional premium.

Perils insured against include those on the TDP-1 form as well as:

• Accidental Discharge of Water or Steam
• Freezing
• Breakage of Glass
• Falling Objects
• Vandalism and Malicious Mischief
• Collapse of Building

DP 3 (Form 3) - This policy form provides coverage on an ALL-RISK basis {except for specific policy exclusions} for the dwelling and on a named-perils basis for personal property. It provides coverage against all of the same perils included in DP-1 and DP-2 forms but also includes coverage against theft and it includes “Loss of Use” coverage which is 20% of the dwelling coverage as well as “Loss of Rents”, which provides for the loss of rental income suffered by an insured after a loss at a covered property. Investors who have rental property prefer this policy due to this included coverage.

We are, quite literally, EXPERTS at insuring rental units and all other types of investor-related real estate, SFR’s, duplexes and fourplexes to apartments and manufactured homes.  Call us today at (512) 986-6124 or (800) 299-8994 or visit our investor-specific web site below to learn more about how to properly insure your investments!