Dwelling Form Codes

Dwelling form codes are industry designations for policies used to insure non-owner-occupied residential properties: rental homes, landlord properties, and vacant or seasonal dwellings. Unlike homeowners policies designed for owners who live in the property, dwelling forms are structured for owners who are not residents. The three main forms are DP-1, DP-2, and DP-3, each offering a different breadth of coverage.

What is the difference between DP-1, DP-2, and DP-3?

DP-1 is a basic named-peril form covering only explicitly listed causes of loss, primarily fire and lightning. It is used for hard-to-place properties, vacant homes, and distressed structures where standard market carriers will not write. Coverage pays on an actual cash value basis. DP-2 is a broader named-peril form that adds falling objects, weight of ice and snow, and sudden water damage from appliances. DP-3 is the standard landlord form and the most comprehensive option: open-peril coverage on the structure, with optional coverage for personal property owned by the landlord and loss of rental income when a covered loss makes the unit uninhabitable. Our FAQ on admitted vs. non-admitted carriers explains how carrier authorization affects which forms are available for properties that standard carriers decline.

What coverage form do most mortgage lenders require for rental properties?

For most landlords with financed single-family rentals in good condition, a DP-3 with loss-of-rents coverage is the appropriate baseline and typically what the mortgage lender requires. As explained in our FAQ on landlord loss-of-rents coverage, the provision replaces rental income when a covered loss forces a tenant out during repairs. The loss-of-rents limit should reflect at least 12 months of actual monthly rent, not a legacy figure set years ago when rent was lower.

For example, a kitchen fire that forces a tenant out for four months would trigger the loss-of-rents provision on a DP-3 policy, replacing the income the landlord would otherwise lose entirely. For example, a landlord carrying a DP-1 on a financed rental may find the payout falls short of the remaining loan balance after depreciation is applied to a total loss.

How does the form code affect claim payouts?

DP-1 pays actual cash value, meaning depreciation is deducted from the payout. A roof that cost twelve thousand dollars new but has aged ten years may yield far less than replacement cost today. DP-3 can be written on a replacement cost value basis, so the payout covers rebuilding at current material and labor prices. Our FAQ on replacement cost vs. actual cash value explains how that distinction affects claim outcomes.

When does a landlord need more than a standard dwelling form?

Named-peril forms require the policyholder to prove the cause of loss matches a listed peril. Open-peril forms like DP-3 reverse that burden: a loss is covered unless the policy specifically excludes it. Flood, earthquake, and normal wear and tear are excluded under all three forms and require separate coverage or endorsements. Landlords with multiple rentals or properties that sit vacant for extended periods often need endorsements or a commercial policy rather than a standard dwelling form. A coverage review can clarify which form and limits fit your situation.