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HO3 or DP3?


HO3 or DP3?

With so many different types of coverages, it’s easy to get confused. When you’re looking to insure your personal property, the most popular policies are Homeowners (HO3) and Dwelling Fire (DP3). While both provide sufficient coverage for your property, it’s important to know which type of coverage is the best for your home. Not only can the type of policy affect your rates but also what’s covered under your policy.

Here’s how to determine whether an HO3 or DP3 policy is right for you.

HO3 (Standard Homeowners Policy)

HO3 policies are the most common homeowners insurance policy type. How do you know if you should go with an HO3 policy? Ask yourself the following questions:

  • Do you own the property?
  • Do you live in the home?

If you answered “YES” to both questions, then an HO3 policy is for you. This policy will cover the structure, liability and contents. The amount of coverage for each of these areas will be determined by your specific needs. An HO3 policy provides more robust coverage than a DP3 policy.

The coverage included in an HO3 policy will vary depending on whether you own a single-family or multi-family home. In a single-family home, a typical HO3 policy will cover the structure and home’s contents as long as damage is caused by a covered peril. In the case of a multi-family property, if you live in one of the units, the structure and your personal contents will typically be covered.

DP3 (Dwelling Fire Policy)

DP3 policies are similar to HO3 policies but have one major difference - occupancy. If you own a home, but do not live in it, then a dwelling fire policy is the right option for you. This might also apply if you own a home but rent out the rooms or the whole property. A DP3 policy covers the structure, loss of use or rental coverage, and usually personal liability. If you are renting out your property, it’s a good practice to require your renters or tenants to have renter’s insurance (HO4), because a DP3 policy offers limited coverage for their personal property.

Additional items that may not be covered by a DP3 product can include other structures, such as a garage or shed. Lighthouse DP3 does provide replacement cost coverage on the dwelling up to your policy limit. In some cases, loss of rent may be covered. It is important to understand what your insurance policy covers and what is not covered. Check with your agent or insurance company if you have questions regarding your policy.

If shopping for insurance, follow these tips to help find the best agency and policy for you. Lighthouse is here to help guide your way forward.