Dwelling Fire & Rental Property — The Right Form Matters.
The foundation for residential rentals. DP-1, DP-2, or DP-3 policy forms — the difference between them is the difference between a paid claim and a denied one. Most landlords we review are on the wrong form.
The three forms — and which one you actually want
Dwelling Fire policies are written on one of three standardized ISO forms. The difference is in what perils are covered (named-peril vs open-peril) and how the loss is settled (actual cash value vs replacement cost). On any given property, the right form pays meaningfully more on the same claim.
DP-1
Cheapest. Covers a short list of named perils. Settles at actual cash value (depreciated).
- Fire, lightning, internal explosion
- Some windstorm/hail (limited)
- Vandalism only if endorsed
- ACV settlement on covered losses
DP-2
Mid-tier. Named perils, but a longer list. Replacement cost settlement.
- All DP-1 perils +
- Vandalism, theft of building parts
- Falling objects, weight of ice/snow
- Replacement cost settlement
DP-3
Open-peril on the structure. Anything not explicitly excluded is covered. Replacement cost.
- All risks of physical loss
- Exclusions only (flood, earth movement, war, etc.)
- Replacement cost on building
- Almost always the right form on rental property worth keeping
Why most landlords are on the wrong form
The most common mistake: a landlord bought a DP-1 on their first rental ten years ago because it was the cheapest line on the page, and it has rolled over at renewal ever since. The savings on premium ($150–$300/yr in most cases) gets wiped out by the first ACV settlement on a 15-year-old roof or HVAC.
Coverage components beyond the form
The form picks what is covered. These coverage components pick how much:
Dwelling coverage
The structure itself. Replacement cost on DP-3 (subject to coinsurance and adequate limit). Actual cash value on DP-1 and DP-2.
Other structures
Detached garages, sheds, fences. Typically 10% of dwelling coverage automatically; increasable.
Personal property
Coverage for landlord-owned property at the rental (refrigerator, range, washer/dryer if you provide them). Tenant's property is not covered — that's renter's insurance, on the tenant.
Fair rental value / Loss of rents
Pays the rent you would have collected during the period the property is uninhabitable due to a covered loss. See Loss of Rents.
Personal liability
Typically $300K–$500K standard on a DP form. We usually recommend raising to $1M and writing umbrella over it.
Medical payments
Small no-fault medical payments for third-party injuries on the premises.
When Dwelling Fire is the wrong product
Dwelling Fire forms are designed for 1-4 unit residential rentals. They aren't right for:
- 5+ unit multifamily — transitions to commercial multifamily property. Most carriers won't write Dwelling Fire above 4 units anyway.
- Short-term rentals (Airbnb, VRBO) — standard DP forms typically exclude commercial rental use. Needs a purpose-built STR endorsement or form.
- Mixed-use buildings — retail-on-first / residential-above transitions to commercial property forms or a split placement.
- Vacant rental property — most policies restrict coverage on vacant units after 30–60 days. Vacant Building endorsement required.
What it typically costs in NJ
Premium is highly variable; this is what we see on quotes that come through Pete's intake:
- Single-family rental, suburban NJ (Hunterdon, Somerset, Morris, Burlington), no claim history, DP-3 with $1M GL → $800–$1,500/yr
- 2-4 unit multifamily, older urban frame construction, DP-3 → $1,400–$3,200/yr
- Coastal single-family rental, post-Sandy zone, DP-3 → significantly higher, sometimes E&S placement
- Property with claim history (water damage, fire) → underwriting-dependent; some require E&S
FAQ
I have multiple rental properties — one policy or separate policies?
Most carriers can schedule multiple properties on one policy, though some carriers underwrite per-property. We structure your program based on how many properties you have, where they are, and whether the carrier appetite supports a schedule or wants separate placements.
What does dwelling fire cost?
Highly variable. A single-family rental in a non-deprioritized NJ town with no claim history might run $800–$1,500/yr. Older 2-4 unit multifamily, urban properties, or properties with claim history price meaningfully higher.
Do you write rental properties in Newark, Jersey City, Paterson?
Yes — we write across all 21 NJ counties. Urban multifamily in NJ's larger cities has carrier appetite considerations we navigate at quote, but we serve the full state.
Tenant's belongings — am I responsible?
No — tenant's personal property is the tenant's responsibility, covered by their renter's insurance. Your lease should require it. We can put it in the lease template if you don't have one.
The right form, the right limit, the right carrier — picked for your property.
One intake captures the form, the underlying limit, the loss-of-rents calculation, and the umbrella that sits over it. Most quotes come back within 24–48 hours.