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A Dwelling Fire Form 3 (DP-3) is the best coverage that you can purchase for residential rental properties. Unlike DP-1 and DP-2 policies, which are ‘named perils only’, the DP-3 dwelling policy form provides what is known as ‘all risk’ or ‘open perils’ coverage, which means that just about everything is covered unless it is specifically excluded in the language of the policy itself. DP-3 policies are more expensive than their DP-1 and DP-2 cousins, but the extra money is well-worth the additional coverage afforded to you as a property owner.
Also, claims and losses are automatically settled on a ‘replacement cost’ basis and coverage against vandalism and malicious mischief (VM&M) and and water damage (‘accidental discharge’) are also included.
Some important things to know about basic DP-3 policies:
As with DP-1 and DP-2 policies, some of the additional coverages or endorsements, which are not included in DP-3 coverage, but that investors and property owners also need to consider are below. It is important to know that not all companies offer these endorsements with their policies and it is up to you and your agent to decide whether or not these are necessary for your situation.
If you own or manage rental property and you would like for us to review any coverages or policies to see if they are appropriate for your risk, or if you simply want to pay less for the same coverage, call us today at (512) 501-4010 or (800) 299-8994and we will be happy to assist you in finding the right insurance solution for your specific needs.