Dwelling fire insurance, explained
A “DP” policy covers a home’s structure against fire and other perils — and it’s often the answer for rentals, vacant homes, and properties a standard homeowners policy won’t write, including some high-wildfire-risk homes. Here’s how the forms differ and who actually needs one.
What is dwelling fire insurance?
Dwelling fire insurance — formally a Dwelling Property (DP) policy — insures the physical structure of a home against fire and other specified perils. It’s narrower and more flexible than a homeowners policy, which is what makes it the go-to for homes that aren’t owner-occupied or don’t fit standard underwriting. If you’ve been declined for a homeowners policy because of wildfire risk, a dwelling-fire form is frequently the path that’s still open to you.
DP-1 vs DP-2 vs DP-3
The three standard forms, from most basic to most comprehensive.
Named perils — fire, lightning, and internal explosion as standard; vandalism and extended perils (windstorm, hail, smoke) are optional add-ons.
The cheapest and most basic. Pays depreciated value, not full replacement. Common as a last-resort or FAIR-Plan-style policy.
A broader named-perils list — adds things like burst pipes, falling objects, and weight of ice/snow on top of DP-1 perils.
A middle tier — more perils and replacement-cost dwelling coverage, still narrower than homeowners.
Open perils on the structure — covers any cause of loss except those specifically excluded. The closest dwelling-fire equivalent to a homeowners HO-3.
The most comprehensive dwelling-fire form. The usual choice for landlords insuring a rental at replacement cost.
Dwelling fire vs. homeowners insurance
Dwelling fire (DP)
- •Structure + loss of rent
- •Personal property limited or optional
- •Liability often added separately
- •Built for rentals / vacant / hard-to-insure homes
Homeowners (e.g. HO-3)
- •Structure + belongings + liability
- •Additional living expenses included
- •Designed for owner-occupants
- •Broadest package coverage
Who needs dwelling fire insurance?
Landlords & rental owners
The most common use. You insure the building and loss of rent; tenants carry their own renters policy for their belongings.
Vacant or seasonal homes
Homes that sit empty don’t qualify for standard homeowners coverage; a dwelling fire (often DP-1) policy fills the gap.
Manufactured / older homes
Properties a standard HO-3 carrier won’t write are frequently covered on a dwelling-fire form instead.
High-fire-risk homes declined elsewhere
When wildfire underwriting rules you out of a homeowners policy, a DP policy — or a FAIR Plan, which is essentially basic dwelling fire — may be the available path. Pair it with a DIC policy for liability and contents.
Wildfire tie-in: a state FAIR Plan is essentially a basic dwelling-fire policy — which is exactly why you pair it with a Difference-in-Conditions (DIC) policy to add the liability, theft, and water coverage a DP form leaves out.
Need a dwelling fire or high-risk policy? Compare carriers free
Tell us where your home is and we'll match you with carriers and brokers who still write dwelling fire and high-risk home coverage in your area — including ones that cover homes others decline. No spam, no obligation.
Keep reading
Dwelling fire insurance FAQ
What is dwelling fire insurance?
Dwelling fire insurance (a “DP” policy, for Dwelling Property) covers the physical structure of a home against fire and other specified perils. It’s a narrower, more flexible product than a homeowners policy and is most often used for rentals, vacant or seasonal homes, manufactured homes, and properties that don’t qualify for standard homeowners coverage — including some high-wildfire-risk homes.
What’s the difference between dwelling fire and homeowners insurance?
A homeowners policy (like an HO-3) is a comprehensive package: structure, personal belongings, liability, and additional living expenses for an owner-occupant. A dwelling fire policy focuses on the structure (and loss of rent), with personal property and liability either limited or added separately. Dwelling fire is built for non-owner-occupied or hard-to-insure homes; homeowners is built for the place you live in.
What does DP-1, DP-2, and DP-3 mean?
They’re the three standard dwelling-fire forms, from least to most coverage. DP-1 (Basic) is named-perils on an actual-cash-value basis. DP-2 (Broad) adds more named perils and replacement-cost dwelling coverage. DP-3 (Special) is open-perils on the structure — it covers any cause of loss except those excluded — and is the closest dwelling-fire equivalent to a homeowners HO-3.
Why is dwelling fire insurance relevant to wildfire-risk homes?
When wildfire underwriting prevents you from getting a standard homeowners policy, a dwelling fire policy is often the available alternative on the admitted or surplus-lines market. A state FAIR Plan is essentially a basic dwelling-fire policy — which is why it’s paired with a Difference-in-Conditions (DIC) policy to add the liability, theft, and water coverage a DP form leaves out.
How much does dwelling fire insurance cost?
It varies widely by form, location, the home’s value and condition, and wildfire hazard. A basic DP-1 on a low-risk rental can be inexpensive, while a DP-3 on a high-fire-risk home can cost as much as — or more than — a homeowners policy would. Documented home hardening and defensible space affect both price and eligibility. Always compare several carriers.
General information only, not insurance advice. Policy forms, perils, and definitions vary by carrier and state — confirm exact coverage with a licensed agent before buying. FireRisk.ai is independent and not affiliated with any insurer; we may be compensated when you request quotes through a partner.