Property claims glossary
What is a DP-3 policy?
A DP-3 is a dwelling fire policy form commonly used for rental and other non-owner-occupied homes, covering the dwelling on an open-perils basis. Personal property is covered only if purchased and on a named-perils basis, and liability is not included unless added, so the answer on a DP-3 claim depends on what was bought.
Worked example · fictitious claim
A fire damages a rental house insured under a DP-3 with a $250,000 dwelling limit and a $1,000 deductible. The dwelling repairs are $40,000 and the tenant's furniture losses are $8,000. The DP-3 pays $40,000 − $1,000 = $39,000 for the dwelling; the tenant's $8,000 falls to the tenant's own renters policy, if they have one.
How it affects a settlement
A DP-3 usually settles the dwelling at replacement cost only when the home is insured to a required share of its value, and at a lower amount otherwise. For a rented home it pays lost rent rather than the owner's own living expenses.
In practice
A dwelling fire form commonly used for rental and non-owner-occupied properties. Structurally similar to an HO-3 for the dwelling, but with narrower contents and liability provisions, and its own endorsement patterns.
Related
HO-3 policy · Declarations page · Policy coverage checking · property claims glossary