Dwelling Fire Insurance in Texas: DP-1, DP-2 & DP-3 Policies for Homes You Don’t Live In
Not every house is a primary residence. A dwelling policy insures second homes, lake houses, vacant and inherited homes, rentals and properties that don’t qualify for homeowners insurance.
Because dwelling forms differ so much, the policy you pick matters as much as the price. As an independent agency, we compare DP-1, DP-2 and DP-3 options from multiple carriers and explain the differences in plain English.
- Second homes and lake houses
- Vacant, inherited or for-sale homes
- Homes a relative lives in rent-free
- Older homes that don’t qualify for HO
- Rental homes (see landlord insurance)
DP-1
Basic form · named perils
DP-2
Broad form · more named perils
DP-3
Special form · open perils on the dwelling
Multiple Carriers
Compared side by side
What Is Dwelling Fire Insurance?
A dwelling policy, often called a dwelling fire policy, insures a residential building that isn’t your owner-occupied primary home. The name comes from its roots in basic fire coverage. Today, however, dwelling forms range from bare-bones fire protection to broad open-peril coverage.
Unlike homeowners insurance, a dwelling policy is built in separate pieces. As a result, liability, theft and other coverages may be optional rather than automatic.
Dwelling programs are generally written for one- to four-family buildings. For larger buildings, mixed-use properties or growing rental portfolios, see when a rental needs a commercial policy instead of a landlord policy.
| Feature | Homeowners | Dwelling Policy |
|---|---|---|
| Occupancy | Your primary home | Second, vacant or rented homes |
| Liability | Included | Often optional |
| Theft | Included | Often optional |
| Lost use | Living expenses | Fair rental value |
| Flexibility | Package policy | Build what you need |
DP-1 vs. DP-2 vs. DP-3: What’s the Difference?
The biggest differences are which causes of loss are covered and how claims are paid. Keep in mind that each Texas carrier files its own version, so two DP-3 policies can still differ. That’s why we compare the actual wording, not just the form number.
| Feature | DP-1 Basic | DP-2 Broad | DP-3 Special |
|---|---|---|---|
| Dwelling perils | Short list of named perils, such as fire and lightning; others often optional | Longer named-peril list | Open perils, subject to exclusions |
| Claim payment on dwelling | Typically actual cash value | Typically replacement cost, if insured adequately | Typically replacement cost, if insured adequately |
| Personal property | Named perils, if purchased | Named perils, if purchased | Named perils, if purchased |
| Relative cost | Lowest | Moderate | Highest |
| Often used for | Vacant or older homes, tight budgets | Middle-ground coverage | Rentals and well-kept second homes |
Actual cash value subtracts depreciation. For instance, a 15-year-old roof destroyed by hail may pay only a fraction of replacement cost on a DP-1. So, before choosing a basic form to save money, ask how a roof claim would actually be paid.
What Does a Dwelling Policy Cover?
Most dwelling policies are organized into the same coverage parts. Depending on the carrier, some are included and others are added by endorsement.
Coverage A: Dwelling
The house and attached structures, such as an attached garage or porch.
Coverage B: Other Structures
Detached garages, fences, boat docks, sheds and similar structures.
Coverage C: Personal Property
Your belongings kept at the property, such as furnishings at a lake house, if you choose it.
Coverage D: Fair Rental Value
Lost rent, or the rental value of the home, while covered damage is repaired.
Additional Living Expense
On some forms, extra costs if the home is a seasonal residence you use and it becomes unlivable.
Liability & Medical Payments
Usually added by endorsement. Without it, an injury at the property may not be covered.
Homes That Usually Need a Dwelling Policy
Second Homes & Lake Houses
A weekend place near Lake Lavon or Lake Ray Hubbard, or a family cabin, often fits a dwelling or seasonal policy.
Vacant & Inherited Homes
An inherited house, a home waiting to sell or a property between tenants needs coverage that fits vacancy.
Relative-Occupied Homes
If a parent or adult child lives in a home you own, a dwelling policy may be the right fit.
Older or Hard-to-Place Homes
Older homes, or homes with roof or condition issues, may qualify for a DP-1 when homeowners carriers say no.
Homes Under Renovation
A fix-and-flip or major remodel may need a dwelling, vacant or builder’s risk policy, depending on scope.
Rental Properties
Renting to tenants? Our landlord insurance page covers loss of rent, liability and when to go commercial.
Insuring a Vacant House in Texas
Vacancy is one of the most overlooked dwelling policy issues. Many dwelling forms limit or exclude vandalism and glass breakage once a home has been vacant for roughly 60 consecutive days. Meanwhile, some carriers won’t write a vacant home at all.
Fortunately, options exist. Depending on the property, we may use a DP-1, a vacancy endorsement or a vacant dwelling policy from the surplus lines market. The key is to tell us before the home sits empty.
- Tell your agent when it becomes vacant
- Keep utilities on, or winterize plumbing
- Have someone check it regularly
- Keep the lawn mowed and mail collected
- Ask about vacancy permits or endorsements
Dwelling Insurance Considerations in Texas
Texas weather and building trends shape dwelling coverage more than most states. In particular, review these items with your agent.
Wind & Hail
North Texas hail drives many dwelling claims, and percentage deductibles can be large. Consider wind and hail deductible coverage or a deductible buyback, and follow our Severe Weather Tracker.
Fire
Fire is covered on every dwelling form. Still, vacant and seasonal homes can go longer before anyone notices a problem. See local activity on our Structure Fire Tracker.
Water Damage
Sudden pipe bursts are often covered, while slow leaks and freeze damage in unheated homes may not be. Therefore, maintain heat or winterize.
Flood
Dwelling policies exclude flood. For that protection, price a separate policy through the National Flood Insurance Program or a private carrier.
Deductibles & Limits
Insure to rebuild cost, not market value. Otherwise, replacement cost settlement on a DP-2 or DP-3 may be reduced.
Texas FAIR Plan
If no company will insure the home, the Texas FAIR Plan offers a last-resort dwelling policy. However, it pays actual cash value, and wind and hail are optional.
How to Get Dwelling Fire Insurance
Tell Us About the Property
First, share how the home is used, who lives there, its age and roof details, and whether it’s vacant.
We Compare Forms & Carriers
Next, we compare DP-1, DP-2 and DP-3 options from multiple companies and explain the trade-offs.
You Choose Your Coverage
Finally, pick the form, limits and deductibles that fit, and we’ll handle the paperwork.
Local Service for Texas Property Owners
Lavon Insurance serves property owners throughout Texas, with a strong local focus on Lavon and nearby North Texas communities.
Frequently Asked Questions
What is a dwelling policy?
A dwelling policy insures a residential building that isn’t your owner-occupied primary home, such as a second home, vacant home, relative-occupied home or rental. It’s also called dwelling fire insurance.
What does DP stand for in insurance?
DP stands for dwelling property. The number after it, as in DP-1, DP-2 or DP-3, identifies how broad the coverage is.
What is the difference between DP-1 and DP-3?
A DP-1 covers a short list of named perils and typically pays actual cash value. A DP-3 covers the dwelling on an open-peril basis, subject to exclusions, and typically pays replacement cost if the home is insured adequately.
What is a DP-2 policy?
A DP-2, or broad form, covers more named perils than a DP-1 and typically pays replacement cost on the dwelling. It sits between the basic DP-1 and the special DP-3.
Is a dwelling policy the same as homeowners insurance?
No. Homeowners insurance is a package for the home you live in. A dwelling policy is for homes you don’t occupy as your primary residence, and coverages like liability and theft are often optional.
Does a dwelling fire policy include liability coverage?
Not always. Liability and medical payments are often added by endorsement. Without them, an injury at the property may not be covered.
Can I insure a vacant house in Texas?
Yes, although options are narrower. Many dwelling forms limit vandalism and glass coverage after about 60 consecutive days of vacancy, so we may use a vacancy endorsement or a vacant dwelling policy.
What kind of insurance do I need for a second home or lake house?
Many second homes are insured on a dwelling policy, especially if they’re seasonal or occasionally rented. Some carriers also offer a homeowners policy for a secondary residence, so we compare both.
Does a dwelling policy cover personal property?
Only if you add personal property coverage, and it’s usually on a named-peril basis. Tenants’ belongings are never covered by the owner’s dwelling policy.
Does dwelling insurance cover flood damage?
No. Flood is excluded, so you’ll need a separate flood policy through the National Flood Insurance Program or a private carrier.
What if no company will insure my dwelling?
We can check surplus lines carriers first. If no company will write it, the Texas FAIR Plan offers a last-resort dwelling policy that pays actual cash value, with wind and hail coverage optional.
Is a dwelling policy the same as landlord insurance?
Landlord insurance is a dwelling policy used for a rental, usually a DP-3 with liability and loss-of-rent coverage. Our landlord insurance page explains rental coverage and when a commercial policy is needed.
Get Dwelling Fire Insurance Quotes in Texas
Whether it’s a lake house, an inherited home or a property between owners, we’ll compare DP-1, DP-2 and DP-3 options and help you choose with confidence.
Coverage, exclusions, deductibles, limits and eligibility vary by insurer and policy form. Form descriptions are general and may differ from a specific carrier’s wording. This page is for general education and does not change the terms of any policy. Texas License No. 3318921 · NPN 21550532.