What Is A Dwelling DP-2
Tip: DP-2 policies are a special type of homeowners insurance for landlords who want a cost effective option
A DP-2 dwelling insurance policy, also known as a Dwelling Fire Form 2, is a common type of insurance used by landlords to protect their rental properties. It offers broader coverage compared to the basic DP-1 policy while being less comprehensive than the DP-3, making it a popular choice for many landlords.
Key Coverages:
- Dwelling: This protects the physical structure of your dwelling, including the walls, roof, foundation, and attached structures like garages and porches.
- Other Structures: This protects detached structures on your property, such as garages, sheds, pole barns, guest houses, fences or swimming pools.
- Named Perils: The structure of the property is covered for specific perils listed in the policy referred to as a Broad Form
- Personal Liability: Protects the landlord from lawsuits arising from injuries or property damage on the property due to negligence.
- Medical payments: This helps pay for medical expenses if someone is injured on your property, regardless of who is at fault.
- Loss of Rental Income: Reimburses lost rental income if the property becomes uninhabitable due to a covered peril.
- Fair Rental Value Coverage: Covers lost rental income if the property needs repairs that take longer than a pre-determined period.
Tenants Property: Dwelling policies like this one provide no coverage for tenants personal belongings. For that, your tenants would need their own HO-4 policy.
Optional Coverages:
- Personal Property: Allows landlords to add a small amount of coverage for their own belongings within the rental unit, like major appliances, lawn care equipment or permanent fixtures
- Umbrella Insurance: Offers extra liability protection, usually starting at $1,000,000 in coverage, above and beyond the standard limits of your dwelling and auto policies. Depending on the carrier and state laws, this typically includes your motorcycle, RV, boat, ATV, snowmobile and your other vehicles too.
- Sewer Drain Backup: Covers damage caused by backed-up sewer/drain lines or overflowing sump pumps that are normally excluded from dwelling policies.
- Equipment Breakdown: Protects against breakdowns of major appliances and home systems like air conditioners, furnaces, and pools.
- Flood Insurance: Protects against flood damage, which is often excluded from standard policies. A must-have if you live in a flood-prone area.
Who might benefit from a DP-2
- Landlords seeking a balance between affordability and coverage compared to the more comprehensive DP-3.
- Landlords in areas with less risk of certain perils not covered by DP-2, like floods or earthquakes.
- Landlords who already have personal property insurance and don't need coverage for their belongings within the rental unit.