DP-1 or DP-3: the two dwelling fire forms landlords keep getting asked about

If you own a property you rent to somebody else, a standard homeowner's policy is not the right instrument. Homeowner's forms are written around an owner occupied house. Once tenants live there, the exposure changes, and the policies written for that situation are the dwelling fire forms. In practice the conversation almost always comes down to two of them: DP-1 and DP-3.

What a dwelling fire policy is for

It insures the structure you own and rent out, along with the liability that comes with owning it. It is not there to cover your tenant's belongings, which is what their own renters policy is for, and it is worth telling tenants that plainly at the start of a lease so nobody discovers it during a claim.

DP-1, the named perils form

Dwelling Fire Form 1 covers a defined list. Fire, lightning, explosions, smoke and vandalism are the ones that come up most. The important word is defined: if a cause of loss is not on the list, the policy is not responding to it. That makes DP-1 straightforward to read, and it is why it tends to appear on properties where the owner wants basic protection on the structure rather than a broad policy.

The trade off is exactly what it looks like. Anything outside the named list sits with you.

DP-3, the broader form

Dwelling Fire Form 3 works the other way around. Rather than listing what is covered, it covers the residential structure broadly and then states its exclusions. It also brings in rental coverage, which is the part that matters if the property becomes uninhabitable and the rent stops arriving while it is repaired, and personal liability for you as the owner. That combination is why DP-3 is the form most often described as the one built for landlords.

• DP-1 responds to a named list of causes of loss.
• DP-3 responds broadly and then names what it will not do.
• DP-3 typically brings rental coverage and personal liability into the same policy.
• Neither one covers your tenant's belongings. That is a renters policy, in the tenant's own name.

How to actually decide

Start with the property rather than with the form. How old is the building and how much would it genuinely cost to rebuild rather than what you paid for it. How much of your monthly income depends on the rent arriving, because that is the question rental coverage answers. Is the property occupied continuously, or does it sit empty between tenants, because vacancy is treated differently and is one of the more common ways an owner finds out their cover was narrower than they assumed.

Then look at the liability side honestly. You are the owner of a property that other people live in and visit. Stairs, walkways, pools, dogs, contractors doing work on the property, all of it sits somewhere, and if it does not sit with the policy it sits with you.

The paperwork that comes with it

Lenders holding a mortgage on a rental property usually require evidence of cover and want to be listed on the policy. If the property is held in a company rather than in your own name, the named insured needs to match, and getting that wrong is a quiet problem that only surfaces at claim time. If a tenant or a management company asks for proof, the certificate should come from the policy rather than from memory.

One thing not to do is copy a neighbour's arrangement. Two houses on the same street can need different forms, because the difference is rarely the building. It is the mortgage, the ownership structure, how the property is used, and how much the rent matters to you.

Bring the details in

True Way writes both forms, along with condo, townhouse and mobile home cover, from the office at 8029 Lankershim Blvd in North Hollywood. Bring the address, the lender's requirements if there are any, the lease, and how the property is owned. It is a short conversation once those four things are on the counter.