Ask ten owners what they carry on a rental property and most of them say landlord insurance. That phrase does not appear anywhere in the contract. What appears in the contract is a form number. DP 00 01, DP 00 02, or DP 00 03.
DP stands for dwelling property. These forms exist because a homeowners policy assumes the owner lives in the house, and a rental breaks that assumption. If you have not read the five policy forms a short-term rental can be written on, that piece covers where dwelling forms sit among the other options.
The three dwelling forms look almost identical on a quote sheet. They behave very differently on a claim.
What a dwelling policy covers before you pick a form
All three forms use the same structure. Coverage A is the dwelling. Coverage B is other structures, so the detached garage, the shed, the dock. Coverage C is personal property. Coverage D is fair rental value. Coverage E is additional living expense, which matters less on a rental than owners expect.
Liability is not in the base form. That surprises people. A dwelling policy is a property contract. Liability arrives through an endorsement or through a separate policy written alongside it, and plenty of owners find this out for the first time after someone gets hurt on the property.
What changes between DP-1, DP-2, and DP-3 is which causes of loss the contract responds to, and how the claim gets valued.
DP-1, the basic form
DP-1 carries the shortest list of covered perils in the family. In its base version it responds to fire, lightning, and internal explosion. Everything else arrives through an extended coverage endorsement, which adds windstorm, hail, explosion, riot and civil commotion, aircraft, vehicles, smoke, and volcanic eruption. Vandalism and malicious mischief is a separate addition on top of that.
The valuation is the bigger issue. DP-1 is frequently written on actual cash value, meaning the claim payment reflects depreciation. Some carriers write it on a functional replacement cost basis instead, which is its own conversation.
Here is what that looks like with numbers. A hailstorm damages a roof with a replacement cost of $24,000. The roof is 16 years old with a 20-year expected life. On an actual cash value settlement, the carrier depreciates roughly 80 percent of the value and pays about $4,800. Subtract a $2,500 deductible and the check is around $2,300 against a $24,000 job. On a replacement cost form, the same loss pays $21,500 after the deductible, usually in two parts with the depreciation released once the work is complete.
That is a $19,000 difference produced by nothing except the form number.
Owners end up on DP-1 for understandable reasons. It is the cheapest quote in the stack. It is also sometimes the only offer on the table for an older roof, a rural property, or a non-owner-occupied house in a market where carriers are pulling back.
DP-2, the broad form
DP-2 keeps the named-perils approach and lengthens the list. It adds damage caused by burglars, falling objects, weight of ice, snow, or sleet, accidental discharge or overflow of water or steam, freezing of plumbing and heating systems, sudden and accidental damage from artificially generated electrical current, and sudden and accidental tearing apart or cracking of a heating or air conditioning system.
The dwelling is usually valued on a replacement cost basis rather than actual cash value.
The water and freezing perils are the ones that earn their keep in a cold climate. A supply line lets go in a second-floor bathroom in February and runs for two days before anyone walks in. On a DP-1 that loss is a conversation about whether anything on the peril list applies. On a DP-2 it is a covered cause of loss, subject to the policy condition requiring you to maintain heat or shut off the water and drain the system when the property is unoccupied.
That condition matters for seasonal property. Read it before winter, not after.
DP-3, the special form
DP-3 changes the logic. The dwelling and other structures move to open perils, which means the contract covers any cause of loss it does not specifically exclude. The burden shifts. Instead of you proving the cause appears on a list, the carrier has to point to an exclusion.
That reversal is worth more than any single peril you could add to a named-perils form.
One part does not change. Personal property under Coverage C stays on named perils even on a DP-3. The building gets the broad treatment. The contents inside it do not.
If you are on a dwelling policy at all, DP-3 is the one to hold.
Where all three forms fall short for a short-term rental
Picking DP-3 solves the peril problem. It does not solve the occupancy problem, and there are three places that shows up.
Contents. Coverage C on a dwelling form is built for the limited property an owner keeps on site to service the premises. Default limits are small, often a few thousand dollars, and the coverage runs on named perils. A furnished rental with $40,000 of beds, sofas, televisions, and kitchen equipment is carrying an exposure the form was never sized for. Theft is also excluded or sharply limited on dwelling forms unless it is specifically added back.
Income. Fair rental value is usually written as a percentage of Coverage A and calculated against what the property would rent for on a lease. A cabin producing $4,200 in a strong August month gets valued as though it rents for $1,400. If a fire takes the property out of service for six months, the shortfall is not a rounding error.
Occupancy. A dwelling form assumes a tenant, a lease, and stable occupancy. Nightly guests are a different exposure, and carriers know it. Most now ask about short-term rental use on the application and again at renewal. Answering that question incorrectly, even by accident, creates a misrepresentation problem that outlives the policy period.
How to tell which form you have in about a minute
Pull the declarations page and find the forms and endorsements schedule. You are looking for DP 00 01, DP 00 02, or DP 00 03, followed by a four-digit edition date.
If the form number is not obvious, read the policy itself. A numbered list of covered causes of loss means you are on DP-1 or DP-2. A section that lists exclusions instead, with the dwelling covered for risks of direct physical loss, means you are on DP-3.
Then check the valuation language on the declarations page. Look for replacement cost or actual cash value next to Coverage A, and look separately at how the roof is treated, because roof settlement schedules are increasingly written as their own endorsement even on replacement cost policies.
Three questions worth asking
Ask your agent which DP form the policy uses and whether a DP-3 is available for the property. If the answer is no, ask why, because the reason usually points at roof age, protection class, or prior losses, and two of those are fixable.
Ask how the roof is valued, in writing. Replacement cost on the dwelling with a depreciation schedule on the roof is a common structure now, and it changes the math on the most likely claim you will ever file.
Ask whether the carrier knows the property is rented nightly and where that appears in the file. Not whether the agent knows. Whether the carrier does.
If you want a second set of eyes on the answers, start with a free Risk Score. Thirty checks across six risk domains, about eight minutes, no email required to see your results.
This is the second article in a series on short-term rental insurance fundamentals. Threshold STR reads policies against how properties actually operate, and delivers a written, ranked summary of the gaps.