If you’ve been comparing home insurance policies in Sacramento, you may have come across the term “DP” on your policy or quote. It usually appears as DP-1, DP-2, or DP-3 — but what exactly does that mean?
Let’s break it down in simple terms so you know what type of coverage you’re getting and which DP policy best fits your situation.
🏠 What “DP” Means in Insurance
In home insurance, DP stands for “Dwelling Property.”
It’s a type of insurance policy designed to protect homes that aren’t owner-occupied — such as rental properties, vacation homes, or investment properties.
These policies are often referred to as landlord policies because they’re commonly used by property owners who rent out their homes in Sacramento and the surrounding areas.
🔢 The 3 Types of Dwelling Property Policies
There are three main types of DP policies: DP-1, DP-2, and DP-3.
Each one offers a different level of protection depending on your needs and budget.
DP-1: Basic Form
This is the most basic and affordable type of dwelling policy.
Coverage:
- Protects against only a few specific “named perils,” such as fire, lightning, or vandalism.
- Pays out claims on an actual cash value basis — meaning depreciation is deducted from the payout.
Best for:
Older homes, vacant houses, or properties where you only want minimal coverage at a low cost.
DP-2: Broad Form
The DP-2 policy offers broader protection than DP-1 and covers a longer list of perils.
Coverage:
- Includes additional perils like windstorm, theft, burst pipes, or falling objects.
- Pays on a replacement cost basis (no depreciation).
Best for:
Sacramento landlords who want reliable protection without paying for a premium policy.
DP-3: Special Form
The DP-3 policy is the most comprehensive dwelling policy available.
Coverage:
- Covers the property for all risks unless specifically excluded (open-peril coverage).
- Includes loss of rental income, liability, and replacement cost for structural damage.
Best for:
Owners of single-family rental homes or long-term investment properties who want full protection from most risks — including those common in Sacramento, like water damage from storms or wildfires nearby.
🌇 Why DP Policies Matter in Sacramento
With Sacramento’s mix of rental properties, duplexes, and older homes, many property owners need Dwelling Property insurance instead of traditional homeowners (HO) insurance.
If you’re renting out your home or plan to move but keep your property as an investment, your standard HO3 homeowners policy may not cover tenant-related risks.
Switching to the right DP policy ensures you’re protected against damage, liability, and income loss from rental interruptions.
💬 Final Thoughts
In short:
- DP = Dwelling Property
- DP-1 = Basic coverage
- DP-2 = Broad coverage
- DP-3 = Special (most complete) coverage
Choosing the right DP policy depends on how you use your property, your budget, and how much risk you’re comfortable taking on.
👉 Contact Yates Insurance today to find out whether a DP-1, DP-2, or DP-3 policy is right for your Sacramento rental or investment home. Our local team can compare multiple carriers to find the best rate and protection for your property.