DP-1, DP-2 and DP-3: the landlord policy forms explained
DP-1, DP-2 and DP-3 are common dwelling fire policy forms used for rental houses. DP-1 is the most basic and covers named perils, DP-2 covers a broader list of named perils, and DP-3 generally covers the building on an open-perils basis. The exact coverage depends on the insurer and the endorsements, so ask your agent for a plain comparison.
What the DP forms are
A dwelling fire policy is a type of property policy for homes that are not owner occupied, such as a rental house, a condo you rent out or a small multifamily building. The DP numbers refer to forms that insurers use to set out what the policy covers. They differ in how many causes of loss they cover and in how they pay claims.
Insurers may use their own names and forms. A few call their rental product a landlord policy or a rental dwelling policy without a DP number. Treat the numbers as a guide to the type, then read the policy that was quoted to you.
How the three compare in general
| Form | How it covers the building | Typical features to check |
|---|---|---|
| DP-1 | Named perils, a short list such as fire, lightning and some others | Often actual cash value; narrow list; low cost |
| DP-2 | Named perils, a broader list than DP-1 | May include more events such as certain types of water damage; check replacement cost option |
| DP-3 | Building on an open-perils basis, meaning covered unless excluded | Often replacement cost; personal property rules differ |
Named perils means the policy pays only for causes it lists. Open perils means the policy pays for any direct physical loss unless the cause is excluded. Open perils is not the same as covering everything, since the exclusions still apply.
Questions to ask your agent
- Is the building covered at replacement cost or actual cash value?
- Is the policy named perils or open perils for the building?
- Does it include liability coverage, and at what limit?
- Does it include loss of rent (fair rental value), and for how long?
- What is the vacancy clause?
- Are there exclusions for water backup, mold or tenant vandalism, and can I add them back?
- How are the roof and the appliances paid?
Example a made-up owner is quoted $900 a year for a DP-1 and $1,150 for a DP-3 on the same rental house. The $250 difference is the price of broader building cover and, in this quote, replacement cost. The owner chooses by asking what each pays on a $30,000 water damage claim.
This is general information, not insurance advice. Prices and terms in the example are made up.
Matching the form to the property
A cheaper, narrower form can fit an older, low-value rental where the owner holds cash reserves. A broader form can fit a newer or higher value property where a large loss would be hard to absorb. Larger apartment buildings are usually insured on commercial policies and not on DP forms, so a small multifamily owner should ask the agent which category applies.
Practical next steps
Once you have two quotes, read them line by line instead of comparing only the total. Check the building limit, the deductible, the liability limit, the loss of rent limit, and whether the quote lists the vacancy period. Write the answers in a small table, one column per quote. A lower price often comes from a lower limit, a higher deductible or a narrower list of covered causes. Ask the agent to explain each difference in writing and keep the table with your policy documents for next year's renewal.
How DoorKeeping handles it
DoorKeeping keeps each property's books separate, so insurance premiums can be coded to the property they protect, and the declarations page can be stored as a document next to the lease and ledger. Renewal prices over the years are easy to compare from the books. DoorKeeping keeps the paperwork around insurance in one place and does not sell or replace insurance.
Sources
- Insurance Information Institute, consumer guides on insurance, read Oct 30, 2026
- NAIC, National Association of Insurance Commissioners, consumer information, read Oct 30, 2026
Questions
- What is the difference between DP-1 and DP-3?
- DP-1 is a basic named-perils form. DP-3 generally covers the building on an open-perils basis. The details depend on the insurer.
- Is DP-3 the same as a landlord policy?
- Often a DP-3 is sold as a landlord policy for a rental house. Some companies use their own forms, so read the policy quoted to you.
- Does an apartment building use a DP form?
- Larger apartment buildings are usually insured on commercial policies. Ask an agent which type fits your building.