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DP-1 vs. DP-3: Which Dwelling Fire Policy Fits Your Connecticut Property?

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When it comes to protecting your property investment in Connecticut, understanding your insurance options is crucial. Dwelling fire insurance is a specialized policy designed for rental properties, vacant homes, and investment properties. Unlike standard homeowners' insurance, dwelling fire policies are tailored to cover properties that are unoccupied or used primarily for income generation.


If you own property in Connecticut — or anywhere in the U.S. — knowing the difference between DP-1 vs DP-3 policies can save you money, ensure adequate coverage, and protect your investment from unexpected disasters.


What Is Dwelling Fire Insurance?

Dwelling fire insurance is a type of property insurance that covers damages caused by fire and other perils to structures that may not qualify for a traditional homeowners policy. It is particularly popular among landlords, vacation home owners, and property investors.


While standard homeowners insurance generally covers occupied residences, dwelling fire insurance policies are specifically designed for:


  • Vacant homes

  • Rental properties

  • Older homes that may not meet modern building codes


Dwelling fire insurance policies can differ widely in coverage, claim settlement methods, and premium costs, so understanding your options is key.


Understanding DP-1, DP-2, and DP-3 Policies

Dwelling fire insurance policies are commonly categorized into three types: DP-1, DP-2, and DP-3. Each offers a different level of protection, coverage, and cost.

Policy Type

Coverage Type

Perils Covered

Ideal Use Case

DP-1

Basic

Named-peril (fire, lightning, internal explosion)

Older homes, low-value properties, vacant properties

DP-2

Broad

Named-peril (adds windstorm, hail, vandalism, theft)

Rental properties, properties in safer neighborhoods

DP-3

Special

Open-peril / all-risk

High-value properties, long-term rentals, landlords seeking maximum protection

DP-1 vs DP-3 — The Key Differences

When deciding between DP-1 and DP-3 policies, there are several factors to consider:


1. Coverage Scope

  • DP-1: Offers basic protection and covers only named perils, such as fire, lightning, and sometimes limited water damage. Other risks like theft, vandalism, or weather damage are typically excluded unless added as endorsements.

  • DP-3: Known as an “all-risk” policy, DP-3 provides comprehensive coverage for all perils except those explicitly excluded. This often includes fire, theft, windstorm, hail, vandalism, and more.


2. Claim Settlement Method

  • DP-1: Usually pays claims based on actual cash value (ACV) — meaning depreciation is deducted.

  • DP-3: Often provides replacement cost coverage, reimbursing the cost of rebuilding or repairing the property without depreciation.

3. Cost Differences

  • DP-1: Lower premiums, making it attractive for properties with limited value or temporary coverage needs.

  • DP-3: Higher premiums, but the expanded coverage can save landlords thousands in the event of a major loss.


4. Ideal Use Cases

  • DP-1: Vacant or older homes that are low-risk and require minimal coverage.

  • DP-3: Long-term rentals, higher-value investment properties, or properties in areas prone to natural disasters.


Which Dwelling Fire Policy Is Right for Your Connecticut Property?

Choosing the right policy depends on multiple factors:


1. Property Location and Risk

Connecticut experiences varied weather — from heavy snow in winter to occasional hurricanes along the coast. DP-3 policies offer broader coverage for weather-related claims, while DP-1 may suffice for low-risk inland areas.


2. Property Usage

  • Rental properties: DP-3 is generally recommended because it covers a wider range of risks.

  • Vacant homes: DP-1 might be sufficient for short-term coverage, but DP-3 can provide peace of mind for long-term vacancies.


3. Property Age and Condition

Older homes may be more susceptible to damage or fire. While DP-1 provides basic protection, DP-3 ensures replacement cost coverage, which is critical for properties that may require expensive repairs.


4. Lender or Investor Requirements

Some lenders require all-risk coverage (DP-3) for financing or mortgages, particularly on rental or high-value properties.


Quick Cost Comparison in Connecticut

While premiums vary based on location, property value, and coverage limits, here’s a rough estimate:

Policy

Average Annual Cost (Connecticut)

DP-1

$500–$900

DP-3

$1,200–$2,500

Factors affecting cost:

  • Property age and construction type

  • Location and natural hazard risk

  • Coverage limits and deductible selection

  • Whether the property is vacant or rented

Pro Tip: Bundling your dwelling fire policy with other business insurance in CT can sometimes lower overall premiums.


FAQs About Dwelling Fire Insurance in Connecticut


1. Is dwelling fire insurance required in Connecticut?

Not by law, but many lenders or mortgage companies require it for financed properties, especially rentals.


2. Can I insure a vacant property?

Yes. DP-1 or DP-3 policies can cover vacant homes, but DP-3 is recommended for long-term vacancies due to broader coverage.


3. How is dwelling fire insurance different from homeowners' insurance?

Homeowners insurance covers your primary residence with more personal property protection. Dwelling fire insurance focuses on structures only, often for non-owner-occupied or vacant properties.


4. What does a DP-3 policy cover that DP-1 does not?

DP-3 covers all perils except those specifically excluded, including theft, vandalism, falling objects, weight of ice/snow, and accidental water damage — while DP-1 only covers named perils like fire or lightning.


5. Can landlords in Connecticut get dwelling fire coverage for multiple properties?

Yes. Landlords can bundle multiple properties under a single dwelling fire insurance program to streamline management and potentially reduce premiums.


Get Expert Help Choosing the Right Policy

Choosing between DP-1 vs. DP-3 can be confusing, especially with Connecticut’s unique weather risks and property market dynamics. At Insure Connecticut LLC, we specialize in helping landlords, property investors, and homeowners select the dwelling fire policy that fits their needs.


Our licensed insurance experts can provide:


  • Personalized quotes for Connecticut and other states

  • Guidance on DP-1, DP-2, and DP-3 policy selection

  • Insights on bundling with other insurance products for maximum savings

Protect your property today — contact Insure Connecticut LLC to find the best dwelling fire coverage for your investment.

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