When a homeowner moves out and rents the property to tenants, the homeowners policy is no longer the right fit — and may not respond at all, since it's written for an owner-occupied home. A rental property should be insured on a dwelling policy, with the DP-3 being the broadest common form.
Why the homeowners policy doesn't work
- Homeowners policies are designed for properties the owner lives in.
- Renting out the home is a material change that can void or limit coverage.
- A homeowners policy also bundles in coverage for the owner's own belongings and liability that a landlord doesn't need the same way.
What a DP-3 provides
- Dwelling coverage on an open-peril basis — broad protection for the structure itself, typically on a replacement-cost basis.
- Loss of rents (fair rental value) — replaces the rental income you lose while a covered loss makes the unit uninhabitable and being repaired.
- Landlord liability — protection if a tenant or visitor is injured on the property and the owner is held responsible. (Liability is often added by endorsement on dwelling policies — confirm it's included.)
One more point for clients
The landlord's policy covers the building, not the tenant's possessions. Tenants should carry their own renters insurance for their belongings and personal liability — many landlords now require it in the lease.
Educational only — confirm against the actual policy and your carrier's guidelines.