If you own several properties, or if there are multiple houses on your property, a homeowners insurance policy may not provide the protection you need against perils such as fire. Dwelling fire insurance policies cover properties that are not your primary residence. This includes investment homes such as rental properties and vacation homes.
How Dwelling Fire Insurance Is Different from Homeowners Insurance
Dwelling fire insurance policies are designed to cover homes that aren’t your primary residence. Similar to homeowners insurance, a dwelling fire insurance policy will reimburse you the cost of rebuilding or repairs in the event of a fire.
Dwelling fire insurance also covers attached structures like attached garages, porches, and decks. However, unlike homeowners insurance, dwelling insurance doesn’t cover the possessions in a home or provide liability coverage.
What Can Be Covered by Dwelling Fire Insurance
- Investment Properties
Protection of rental property is one of the primary uses of dwelling fire insurance. House fires are often a result of negligent behavior , and it’s almost impossible to control what happens in a property where you don’t reside. In addition to covering the repair or rebuilding costs, dwelling insurance also reimburses you for the lost rental incomes as well as covers the relocation costs for tenants.
- Secondary Residences
This coverage is also ideal for vacation homes that you occupy occasionally.
- Owner Occupied
In some situations, your primary residence may be exempt from the standard homeowners insurance. This could be due to your claims history, credit history, or a house that’s in a poor state. In this case, a dwelling fire insurance policy can be an alternative to a homeowners policy.
- Vacant Homes
A dwelling fire insurance policy can also be useful in case of an unoccupied home that’s undergoing renovation or is out for sale in the market. Unoccupied homes are exposed to fire threats that may result from electrical shorts, lightning strikes, and vandalism.
- Internal explosion
- Malicious mischief and vandalism
- Extended coverage that covers damage that emanates from the following: smoke, hail or windstorms, riots, vehicles or aircraft, and volcanic eruptions.
- Burglary damage
- Glass breakage
- Overflow of stream or water, or accidental discharge
- Freezing pipes
- Falling objects (like trees)
- Electrical damage
- Burning, bulging, cracking, or tearing apart of property
- Total Collapse
- Water damage
- Intentional loss
- Laws and ordinances
- Gradual losses like rot, rust, and mold
- Some kinds of water damage
- Earth movements like earthquakes
Types of Dwelling Fire Insurance Policies
The main types of dwelling fire insurance policies include:
DP-1 (Basic Form)
DP-1 covers named perils (covers risks that are explicitly listed in the policy) and covers losses that result from the following:
The basic form also includes these two optional endorsements:
DP-2 (Broad Form)
The broad form covers all the perils covered by the basic form, but also includes the following additions:
DP-3 (Special Form)
The special form is an “all-risk” or “open perils”; this means it protects against all types of perils except those named in your policy. Some of the typical exclusions include:
Dwelling fire insurance covers perils that may upend your rental property business and protects your rental income. At McCarty Insurance Agency, we will help you find a dwelling fire insurance policy that suits your needs. Contact us today to get started!
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