Living Prepared


Comparing a DP3 policy and a HO3

When purchasing homeowners insurance it’s important your know which policy will best fit your needs. Do you know the difference between a DP3 and HO3?

In comparing a DP3 policy and a HO3 policy, the DP3 is a dwelling and fire policy, also known as an "open risk" or "all perils" policy. Your personal property usually isn't usually included in DP3 coverage but is in an HO3.

Single Family Home HO3 Policies

The HO3 is a standard single family home policy and is adequate for most homeowners' personal insurance needs. With this policy, your home is covered for just about anything that happens, so long as it's not excluded from coverage. In addition to HO-3 policies, many homeowners also add optional endorsements to strengthen coverage.  

Multi-family homes and HO3 policies

In most cases you can cover yourself, your structure and your personal property if you own a building of up to four units, and you're domiciled in one of those units. It's important to remember that a person can have several residences, but they can only have one domicile.

DP3 for rental properties

A Dwelling Fire (DP3) policy is typically taken out on a residential property that’s rented out to tenants. This policy covers losses to the home’s structure, loss of use or rental coverage, and usually personal liability. These policies also allow additional coverage through endorsements.

So which policy type is best for you?

If you live in a single family home, you'll be sufficiently covered with an HO3 policy, but be sure to explore your opportunities with special coverage and endorsements, particularly in the context of replacement value of both the home and personal property. Rental properties are best insured with a DP3 policy as it will cover what’s most important to you and could even cover loss in rent in some scenarios.

As always, it’s best to consult an agent before making any final decisions. Contact Prepared Insurance with your questions.