What is DP 3?
DP 3, or Dwelling Policy 3, is an insurance policy that provides robust coverage for residential properties, particularly single-family homes that are not owner-occupied. This type of policy is popular for rental properties and vacation homes because it offers a combination of broad dwelling protection and limited personal property coverage.
A DP 3 policy typically insures the structure of the home on an “open perils” basis, which means it covers all risks unless explicitly excluded in the policy. However, personal property under a DP 3 policy is covered on a “named perils” basis, limiting the protection to specific risks like fire, theft, or vandalism.
The policy often includes loss of rental income coverage, which reimburses landlords if the home becomes uninhabitable due to a covered loss. In some cases, liability coverage can also be added to protect against lawsuits or medical expenses if someone is injured on the property.