Every dwelling-fire policy is written on one of three standardized forms. They look similar on a declarations page and they price differently — which is exactly how landlords end up on the cheapest one without realizing what they gave up. Here's the difference, and why it decides your claim.
The two variables that matter
Two things separate the forms: which perils are covered (a short named list vs. open-peril "everything not excluded"), and how losses are settled (actual cash value, which subtracts depreciation, vs. replacement cost, which doesn't).
| Form | Perils | Settlement |
|---|---|---|
| DP-1 (Basic) | Short named-peril list | Actual cash value (depreciated) |
| DP-2 (Broad) | Longer named-peril list | Replacement cost |
| DP-3 (Special) | Open-peril on the structure | Replacement cost |
Why DP-3 is almost always the right answer
On a rental property worth keeping, DP-3 is the form. Open-peril means the burden flips: instead of you proving the loss came from a covered peril, the carrier has to prove it's excluded. Replacement cost means a 15-year-old roof gets rebuilt, not depreciated to a fraction of its value. The premium difference between DP-1 and DP-3 is usually modest — often $150–$300/year — and the first ACV settlement on an older roof or system erases that savings many times over.
When a cheaper form is defensible
Occasionally DP-1 makes sense — a low-value structure where the land is the asset, a property slated for demolition, or a carrier-appetite situation where DP-3 isn't available. Those are deliberate choices, not defaults. The problem isn't DP-1 existing; it's DP-1 by accident.
The form is necessary, not sufficient
Even the right form leaves gaps the base policy doesn't fill: ordinance or law for code upgrades on older NJ buildings, adequate loss of rents, and an umbrella over the liability. The form picks what's covered; those endorsements pick how much. We pick all of it for the property.