Landlord Insurance (DP-3)
If you rent out a home, condo, or multi-unit property, a standard homeowners policy does not cover you. You need a Dwelling Policy (DP-3) built for landlords.
What Is a DP-3 Policy?
A DP-3 Dwelling Fire policy is the industry-standard landlord insurance product. Like an HO-3, it covers the dwelling on an open-perils basis — any damage not explicitly excluded. Key covered losses include fire, windstorm, hail, lightning, and vandalism.
The critical difference from HO-3: DP-3 is for non-owner-occupied properties. It adds loss of rental income coverage and liability protection for tenant-occupied buildings.
What DP-3 Covers
Open-perils coverage for walls, roof, foundation, and built-in appliances.
Detached garages, fences, and sheds on the property.
Pays fair rental value while the property is uninhabitable from a covered loss.
Covers legal defense and damages if a tenant or visitor is injured and sues.
Covers minor injuries on the premises regardless of fault ($1K–$5K).
Tenant or third-party vandalism is covered under most DP-3 policies.
DP-3 vs. HO-3 — Side by Side
| Coverage | DP-3 Landlord | HO-3 Homeowner |
|---|---|---|
| Rental dwelling structureHO-3 is for owner-occupied homes only. | ✓ | ✗ |
| Loss of rental incomePays rent while the home is being repaired. | ✓ | ✗ |
| Landlord liabilityBoth cover liability for injuries on the property. | ✓ | ✓ |
| Tenant personal propertyTenants must carry their own renters insurance. | ✗ | ✗ |
| Vacant home coverageDP-3 bridges vacancy; HO-3 excludes 30–60 day vacancies. | ✓ | ✗ |
| Flood damageNeither covers flood — add a separate NFIP or private flood policy. | ✗ | ✗ |
Short-Term Rentals (Airbnb / Vrbo)
Standard HO-3 and DP-3 policies often exclude short-term rental activity. Disclose STR use to your insurer. Many carriers now offer STR endorsements or standalone policies.
Airbnb Host Protection Insurance covers up to $1M liability but generally does not cover dwelling damage from guests. A dedicated STR policy fills this gap.
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5 Landlord Insurance Tips
- 1Require tenants to carry renters insurance — their belongings are not covered by your DP-3.
- 2Increase liability limits to at least $300K, or add a personal umbrella policy for $1M+ at ~$200/yr.
- 3Document the property with photos before each tenancy to speed claims and prevent disputes.
- 4Add flood insurance if your rental is in or near a FEMA flood zone — DP-3 does not cover flooding.
- 5Review your policy annually. Home values and rental income have risen significantly since 2020.