There are three basic landlord insurance forms:

  • DP-1: Basic budget coverage that covers common occurrences like renter vandalism and fires. Most of these policies are actual cash value, rather than replacement value policies. The carrier will subtract depreciation before issuing a benefit. See the replacement cost section below.
  • DP-2: Broader coverage for named perils. Check the policy for the list of perils; perils not specifically named will generally not be covered.
  • DP-3: Also called “open peril,” this form covers all perils not specifically excluded by the policy. Common exclusions include:
    • Flood damage or water damage covered via the National Flood Insurance Program
    • Damage from earthquakes, sinkholes, and earth movement
    • Power failure
    • Neglect
    • Acts of war or terrorism
    • Nuclear hazards
    • Intentional loss
    • Mold

A DP-3 policy doesn’t automatically pay benefits for damages due to theft or on damage to contents. But you can add contents coverage, which may be worth considering, especially if you are renting furnished dwellings.

The DP-3 policy is the most common choice for landlords renting one- to three-family properties that are not owner-occupied. Buildings with more than three families are often covered via commercial insurance rather than landlord insurance. You can also get coverage tailored for resort properties, as well as short-term rentals—be sure to tell your agent if you plan to engage in these.