Rental property insurance for landlords

Most people understand property insurance by comparing it to the policy they have for their home, which offers very wide coverage. However, a rental policy does not qualify for a true homeowner’s policy. Most agents will direct you to a rental property policy. If you’re a landlord, Westrock Insurance will offer you two options to insure your rental property, described below.

The insurance terms for rental property coverage are Dwelling Property (DP) 3 & Dwelling Property 1, a class of coverage for housing insurance created by the Insurance Standards Organization. The number is a designation for one of several standard DP packages. For example, DP-3 offers comprehensive coverage for rental and seasonal occupancy classes. The coverage is similar to a standard homeowner’s policy. Dwelling Property 1offers named-peril coverage for owner, rental, seasonal, and vacant occupancy classes. They each have different requirements for the property's physical description and offer different ranges of coverage.

DP-3 property eligibility

In order to be eligible for DP-3 property coverage, the home must be not more than 80 years of age (60 years in some states). The roof must have been updated within the past 20 years and is in above average or better condition. Structures housing up to 4 families condominiums and apartment buildings are not eligible.

DP-3 coverage is the most extensive coverage you can purchase. The major advantage of DP-3 coverage is that it avoids depreciation adjustments that apply to an actual cash value settlement, which can leave you without enough money to rebuild or replace your vehicle or property. Keep in mind that even though you may have replacement cost coverage, the policy will pay up to the maximum value listed on the policy.

Actual cash-value loss settlement

In the event of a total loss, the insurance company will establish a value for the damage. The standard settlement option, actual cash value (ACV) considers the depreciated value of your property. This may not provide enough cash to replace the item with an equivalent. Keep in mind that the policy will pay up to the maximum value listed on the policy. Supplemental coverage is optional

Other rental property insurance options

Landlords with rental mobile homes will want to look at our program just for mobile homes. Real estate investors with 10 or more rental properties can simplify insurance management by combining all of their holdings onto one policy form, with one renewal date and one payment schedule.

Let Westrock Insurance analyze your coverage needs and determine which rental property coverage is right for you. Click here to find out how.