Texas DP-2 Insurance

A longer list, not an open-ended promise

The Texas Department of Insurance says named-perils policies cover only the events listed. All-risk, or open-perils, policies cover what they do not exclude, and even those usually leave out termites, wear and tear, sewer backup, flood, earthquake, mold removal, and foundation repair. Texas DP-2 insurance sits in the named-perils column with a broader list than a basic fire form. If the cause of a loss is not on that list, the claim is not a covered claim, no matter how sudden it felt.

The broad form covers the basic perils and also vandalism and malicious mischief, windstorm or hail, fire or lightning, explosion, riot or civil commotion, aircraft, vehicles, smoke, burglary damage, weight of ice and snow, accidental discharge or overflow of water or steam, falling objects such as trees, freezing, sudden and accidental damage from artificially generated electrical current, volcanic eruption, and sudden and accidental tearing apart, cracking, burning, or bulging. That is the usual picture of a common broad form. A Texas company can edit the list. Read “perils insured against” on the specimen, not a summary on a webpage.

Water, freezing, and an empty house

Accidental discharge of water or steam is one reason landlords move from a basic form to a broad form. A common broad form ties that peril to the building not having been vacant for 60 days before the loss. Treat the 60 days as that common description, not as a number we are assigning to every Texas policy. TDI says policies often will not pay losses when a house is vacant for the number of days the policy itself specifies. Find that number on your form. A rental that sits empty between tenants can lose water-discharge coverage, vandalism coverage, or both, on whatever timetable the contract uses.

Freezing is on the broad-form list in that same guide. Frozen pipes are a Texas winter problem even in a state people think of as hot. Ask whether freezing coverage depends on you maintaining heat or draining the system while the house is empty. If the form requires heat, a thermostat set low to save money can be the reason a claim is declined. Sudden tearing, cracking, or bulging of a system is a different listed peril from a slow drip. TDI says a continuous water leak is the kind of damage most policies do not cover, and mold removal is not covered except to repair damage from a covered risk.

Replacement cost, rent, and extra living costs

Unlike the basic form, the broad form typically settles claims on a replacement-cost basis. Replacement cost aims at what it costs now to repair. Actual cash value subtracts depreciation. TDI’s roof example is the plain version: replacement cost looks at today’s price of the roof, then the deductible comes off. Ask whether the DP-2 quote you were handed really uses replacement cost on the dwelling, and whether you must insure to a stated percentage of rebuild cost before that settlement applies. We will not invent that percentage. If the form names one, it will be printed there.

The same guide says loss of rent, additional living expenses, collapse, debris removal, and improvements, alterations, and additions may be included on a DP-2. “May” is the important word. Loss of rent is how a landlord replaces income when a covered loss makes the house unlivable. Additional living expenses, in TDI’s words, pay rent, food, and other costs you would not have had if you were still in the home. On a rental you do not live in, ask which of those two the form actually sells. A landlord who does not live there may need lost rent more than a hotel receipt. A house you sometimes occupy may need both. Do not assume the broad form copied a homeowners policy’s extra-living-expense paragraph.

Wind, theft, and the tenant’s property

Windstorm or hail appears on the broad-form list above. TDI still warns that on the Gulf Coast a home policy may not include wind and hail at all. If the rental is coastal, ask whether this DP-2 includes wind or whether wind is excluded and must be bought separately. Our windstorm guide covers that separate policy. Falling objects, including trees, are also on a typical broad-form list. A tree on the house and a tree that only falls in the yard are not always the same claim. TDI’s disaster guidance says many policies pay when a tree hits the house and usually do not pay to remove a tree that only lands in the yard. Match the form.

Burglary damage on a broad form is damage from a break-in, not automatically the theft of the tenant’s television. The tenant’s belongings need a renters policy. TDI says the owner’s policy does not replace them. If you leave appliances that you own, ask whether theft of your property is covered or only damage to the building caused by burglars. Those are different sentences.

Flood is not on the list. TDI says most policies do not cover flooding. A hurricane that brings wind and rising water can be two contracts. Buy flood separately if you need it.

Whether a lender will accept a named-perils broad form

TDI says that if you owe money on the house, the lender will probably require an all-risk policy. A DP-2 is broader than a basic fire form and still named perils. It may not be the contract the lender described. Ask the servicer before you bind a form they will reject at the next escrow analysis. If you own the house free and clear, the lender is not in the conversation, and the question is only whether the listed perils match the way the house can actually be damaged.

Short-term rental use is a second mismatch. TDI says most policies will not pay for damage or injuries during short-term rentals. A broad form written for a one-year tenant can exclude weekend stays. Tell the agent how you rent. Liability for someone hurt on the property is another ask. TDI describes personal liability as paying when you are responsible for injury or for damage to someone else’s property, plus court costs. Confirm it is on this quote or on a separate policy. A named building peril does not answer a trip-and-fall by itself.

Deductibles, coinsurance, and the claim you actually file

A broader list does not shrink the deductible. Wind and hail on a Texas home policy are often a percentage of the dwelling amount, separate from the dollar deductible on other perils. Our wind and hail deductible explainer walks through that math. Ask which deductible applies to water discharge, which applies to wind, and which applies to fire. Three answers on one declarations page are normal.

If the form pays replacement cost only when you insure the house to a stated share of its rebuild cost, an old limit can turn a “full” repair into a reduced payment. TDI’s shopping guide says a dwelling limit should be enough to rebuild, not the market price of the land. Update the limit when you add a room or when lumber prices move. Photograph the house, keep the lease, and keep repair invoices. A broad form pays listed perils. It does not pay you for guessing what the kitchen looked like.

Shop it against the basic form and the special form

See Texas DP-1 insurance for the shorter basic list and Texas DP-3 insurance for open perils on the building. Texas Insurance Resources can line those quotes up with licensed agents. We do not adjust claims. Start with the landlord insurance guide if you want the wider rental-property picture.

Get your free Texas DP-2 rental property quote

Fill out the short form below and a licensed Texas agent will compare carriers for you. It takes about two minutes, there is no obligation, and we never sell your information. Prefer the phone? Call 800-875-4711.

Sources

Vacancy language on a Texas policy may differ from a generic broad form. TDI pages supply the Texas shopping points.

• Texas Department of Insurance, “Home insurance policies: All risk or named peril”.
• Texas Department of Insurance home insurance guide.
• Texas Department of Insurance renters insurance tip.