What is DP 2?
DP 2, also known as the Dwelling Property 2 policy, is a type of insurance designed to protect residential rental or investment properties from a variety of specific perils. Unlike the more basic DP 1 policy, DP 2 offers broader protection with additional named perils and coverage options.
This policy is ideal for landlords or property owners who do not reside in the insured property but want to ensure its protection against more than just the most basic risks. It is often used for homes rented to tenants or seasonal properties that are not occupied year-round.
DP 2 includes named perils such as fire, windstorm, vandalism, falling objects, and more. Unlike DP 1, DP 2 often provides replacement cost coverage for damages to the structure rather than actual cash value, which takes depreciation into account.
For example, if a tree falls on the insured property due to a windstorm, DP 2 would cover the cost to repair the damages caused by this specific peril. However, coverage is limited to the perils explicitly listed in the policy, so property owners must carefully review the terms to ensure adequate protection.
DP 2 policies do not typically cover liability or the personal belongings of tenants, so landlords often pair this coverage with other policies or riders to fill gaps.