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What is the difference between a DP-1 and a DP-3 policy?

I'm a little confused by all the letters and numbers in home insurance. What are the differences between DP-1 and DP-3? What makes them different from the HO policies?

Dec 19, 2022 Columbus, OH

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Beth Swanson

SEO Content Strategist

  • Licensed Insurance Agent — Property and Casualty

Beth joined The Zebra in 2022 as an Associate Content Strategist. She is a licensed insurance agent whose goal is to make insurance content easy to r…

This is an excellent question, thanks for asking! Home insurance can definitely be confusing.

The "DP" in DP-1 and DP-3 stands for "Dwelling Policy."  These policies are typically reserved for homes that you own that are rented to a tenant. Dwelling policies may also apply to vacation homes or homes under construction. That is the big difference between HO and DP. Now, tenants themselves would want to carry renters insurance under an HO-6 policy. Check out our home insurance page to get more in-depth with those policies.

In terms of what is covered under DP-1 vs a DP-3, they are very different policies.

  • A DP-1 only provides coverage for 9 perils (fire/lightning, internal and external explosions, windstorm, hail, riots, smoke, aircraft, vehicles, and volcanic explosions).  A DP-1 also only provides coverage for your home's depreciated value based on its age.
  • A DP-3 is generally preferable because of its wider coverage. It provides coverage for all perils except those specifically excluded from the policy (like earthquakes or floods).  Your home would also be covered at full replacement cost.  This means that if the home burned down to the ground, it would be rebuilt and replaced.  Whereas on a DP-1 you would only get the amount of money the home is worth minus depreciation for the age of the home.

We hope this helps distinguish things for you!

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