Quick answer: Specialty dwelling insurance is the policy type typically used to insure a house you do not live in: a rental property, a vacant home, a seasonal or vacation home, or a home under renovation. A standard homeowners policy is written for owner-occupied homes, so it generally is not the right fit once the owner moves out.
Looking for Rental or Vacant Property Insurance in Westlake Village?
If you own a rental property in Westlake Village or a home that happens to be vacant, a traditional homeowners insurance policy will usually not work.
That is because homeowners insurance is designed for properties the owner lives in. When the owner does not occupy the house, coverage is typically provided under a “specialty dwelling” (also called dwelling fire or landlord) policy instead.
WHINS Insurance Agency represents several carriers who can insure your rental property, or specialty use property.
When Specialty Dwelling Insurance Is Used
There are multiple scenarios where a specialty dwelling policy is commonly used:
Rental Properties — a dwelling policy is the policy type designed for a property rented to tenants. It can include coverages an owner-occupant would not need, such as landlord furnishings, fair rental value and landlord liability.
Vacant Homes — vacant homes can present all kinds of problems, which is why they can be difficult to insure. Many insurance companies want nothing to do with a vacant property. We can help you look at the options that exist.
Seasonal & Vacation Homes — in many cases, to insure a secondary, seasonal or vacation property, standard companies may require that you insure your primary residence with them as well, which isn’t always possible.
Older & Lower Value Homes — if your home is very old and/or its market value is considerably lower than the cost to rebuild it, many insurance companies may hesitate to cover it. We have access to specialty policies built for these types of homes.
Non-Renewals & Prior Losses — if a standard carrier has non-renewed the property or there is a recent claim history, a standard homeowners policy may not be available. A dwelling policy can be the alternative.
Homes Under Construction — in some situations your renovation, addition or reconstruction project may require a specialty dwelling policy.
Dwelling Policy Forms: DP-1, DP-2 and DP-3
Dwelling policies are commonly written on one of three forms. The names and terms vary by carrier, but the general pattern is:
| Form | How the building is generally covered | Typically considered when |
|---|---|---|
| DP-1 (basic) | A short list of named perils, usually fire and a few related causes. Additional perils are often added by endorsement. | Older, lower-value or harder-to-place properties where basic coverage is what is available. |
| DP-2 (broad) | A broader list of named perils than DP-1. | Properties that need more than basic coverage but are not eligible for, or do not need, the broadest form. |
| DP-3 (special) | The building is generally covered on an open-perils basis, meaning covered unless excluded in the policy. Personal property is usually still on named perils. | Well-maintained rentals and other properties that qualify for the broadest dwelling form. |
Perils such as flood and earthquake are generally excluded from all three forms and are insured separately. See our guides to residential flood insurance and why homeowners policies exclude flood.
Homeowners (HO-3) vs. Dwelling (DP-3): Key Differences
| Homeowners (HO-3) | Dwelling (DP-3) | |
|---|---|---|
| Who lives in the home | The owner | A tenant, or no one (rental, vacant, seasonal, under renovation) |
| Building coverage | Generally open perils | Generally open perils on the DP-3 form |
| Owner’s belongings | Personal property is a core part of the policy | Limited to what the landlord keeps at the property, such as furnishings |
| Lost rent | Loss of use for the owner who lives there | Fair rental value can be included for rented homes |
| Liability | Personal liability is built in | Landlord or premises liability is usually added or written separately |
| Tenant’s belongings | Not applicable | Not covered; tenants generally need their own renters policy |
Details depend on the carrier and the policy actually issued.
Insuring a Vacant Home
Vacancy is where most coverage problems start. Many policies restrict certain losses, such as vandalism, glass breakage or water damage, once a property has been vacant for a set number of days, and some carriers will not write a vacant home at all. Before you let a policy lapse or switch to a vacant dwelling policy, read the vacancy and unoccupancy conditions. For a deeper look, see our article on insurance gaps for vacant, seasonal and under-construction homes.
What to Have Ready for a Quote
- Property address, year built, square footage and construction type
- Roof age and the age of electrical, plumbing and heating updates
- Estimated rebuilding cost (not market value)
- How the property is used: tenant-occupied, vacant, seasonal or under renovation
- For vacant homes: how long, why, and what security or maintenance is in place
- For renovations: the scope of work and whether a licensed contractor is involved
- Prior losses, non-renewals or cancellations in the past several years
If Standard Carriers Say No
In California, some owners who cannot find a standard policy look at the California FAIR Plan, and some pair it with a difference-in-conditions (DIC) policy for the broader perils it does not cover. Whether that fits depends on the property. See high-value home insurance and FAIR Plan alternatives and our article for landlords on what to do after a carrier non-renews a rental portfolio. If the property is rented short-term to vacationers, see luxury short-term rental and vacation home insurance.
How to get started on your quote
If you live in Westlake Village and have a property that fits these parameters, give us a call and we can quote your property to see who has the best product for you.
Specialty Dwelling Insurance: Common Questions
Does homeowners insurance cover a house I rent out?
Usually not in the way an owner expects. A standard homeowners policy is written for a home the owner lives in. A home that is rented to tenants, or that sits vacant, is normally insured with a dwelling (landlord) policy instead. Whether a specific loss is covered always depends on the policy wording.
What is the difference between a DP-1, DP-2 and DP-3 policy?
They are common dwelling policy forms. A DP-1 is the most basic and generally covers a short list of named perils such as fire. A DP-2 covers a broader list of named perils. A DP-3 is generally the broadest of the three and usually covers the building on an open-perils basis, with exclusions listed in the policy. Forms and terms vary by carrier.
Can a vacant house be insured?
Often yes, but it is harder. Many carriers decline vacant properties, and many policies limit or exclude certain losses, such as vandalism or water damage, after a home has been vacant for a set period. The reason for the vacancy, how long it will last and the condition of the property all matter, so tell your agent the truth about it up front.
Does a landlord policy cover my tenant’s belongings?
Generally no. A dwelling policy typically covers the building and the landlord’s own property, such as furnishings the landlord provides. Tenants usually need their own renters insurance for their belongings and personal liability.
Does a dwelling policy include loss of rent?
Many dwelling policies offer fair rental value or loss of use coverage, which can respond to lost rent after a covered loss makes the home unlivable. Limits and conditions vary, so ask how it is written.
What does an agent need to quote a rental or vacant property?
Typically the property address, year built, size, construction type, roof age, and updates to electrical, plumbing and heating. Also the estimated rebuilding cost, how the property is used, whether it is tenant-occupied or vacant, any renovation plans, and prior losses or non-renewals.
Related coverage: Homeowners Insurance | High-Limit Personal Umbrella Insurance | All Personal Insurance
Your WHINS Advisor
Review a rental or vacant property with Dean Klipfel
Insurance Advisor
Call: 818-233-0825 ext. 111 | Email: [email protected]
License #4058929 | NPN #19599390 | WHINS Insurance Agency, CA Agency License #0G66655
This page is general insurance information. Coverage depends on the carrier, the policy form and the terms, conditions, limitations and exclusions of the policy actually issued. It is not a guarantee of coverage.
