Landlord Insurance (DP-3)

Definition

Landlord insurance is not homeowners insurance. A homeowners policy (HO-3) is designed for owner occupied properties and usually excludes or limits coverage when the property is used as a rental. Landlord insurance, most commonly issued on a Dwelling Fire Form 3 (DP-3) basis, is specifically built for rentals. It covers the dwelling on an open perils basis, provides personal liability coverage for the landlord, and usually includes loss of rent (also called fair rental value) coverage that pays you lost rent while the property is uninhabitable after a covered claim. Key things to look for when shopping landlord insurance: replacement cost coverage on the dwelling (not actual cash value), liability limits of at least $300,000 (preferably $500,000 or higher), loss of rent coverage for at least 12 months, and ordinance or law coverage to handle code upgrades during rebuilds. Insurance has gotten dramatically more expensive in Florida, Texas, Louisiana, and other high risk states over the last few years, so shopping carriers annually is no longer optional. DoorVault's Insurance Broker Portal integrates directly with Steadily, one of the largest landlord insurance specialists, for automated quoting.

Example

DP-3 policy on a Birmingham rental. Dwelling limit $160,000 (replacement cost). Liability limit $500,000. Loss of rent 12 months. Deductible $2,500. Annual premium $1,340, or roughly $112 per month added to PITI.

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