Home / Texas Insurance Services / Landlord Insurance / DP-3
Texas DP-3 Insurance
Texas DP-3 insurance is the special dwelling form. On a common version of that form, the house and other structures are covered on an open-perils basis, and the landlord’s own belongings stay on a named-perils list. Open perils means the policy pays for sudden damage it does not exclude. It does not mean every loss. Flood, wear, and a slow leak are still the problems Texas shoppers are told to ask about.
Open perils on the building, named perils on contents
The Texas Department of Insurance splits home policies into two ideas. A named-perils policy pays only for events on a list. An all-risk policy, also called open perils, pays for damage except the causes it lists as excluded. TDI says even an all-risk policy usually does not cover termites and other pests, wear and tear, sewer or drain backup, flood, earthquake, mold removal, or foundation repair. A lender who holds a mortgage will probably want an all-risk policy rather than a short named-perils form.
The special form, often called DP-3, is open perils on the dwelling and other structures, with personal property still covered only for named perils. That split matters on a rental. The roof, walls, and a detached garage can be the open-perils part. A refrigerator you own, or tools you store in the garage, can still be limited to a list such as fire and theft. The tenant’s furniture is not on either part. TDI says the owner’s policy fixes the building and a renters policy fixes the tenant’s property.
Treat the guide’s description as a picture of a common form. A Texas company can change endorsements, vacancy rules, and which property is open perils. Read the specimen. If the quote says “special” but the building is still a named list, you did not buy the contract this page is describing.
What open perils still leave out
Typical special-form exclusions include neglect, intentional loss, mold, rust, rot, repeated seepage or leakage, earth movement, wear and tear, and damage from birds, rodents, insects, or animals. TDI’s own list for all-risk policies lines up with several of those: pests, wear, backup of sewers and drains, flood, earthquake, mold removal, and foundation repair. Seeing the same exclusions in more than one description is useful. It is not a promise that your form uses those exact words.
A sudden pipe break that damages drywall is the kind of water loss TDI says most home policies do cover. A drip behind a wall for months is the continuous leak TDI says most policies do not cover. Repeated leakage is also on the special-form exclusion list in the dwelling guide. The argument at claim time is often which of those two sentences the loss fits. Photos, the plumber’s note, and the date you first saw the stain matter more than the word “special” on the quote.
Flood is excluded on both descriptions. Rising water from a storm is not a special-form claim. Buy a flood policy if you need that protection. Sewer or drain backup is called out by TDI as something all-risk policies usually do not cover unless you add it. Ask for that endorsement by name if a finished basement or a first-floor bath has backed up before. Do not assume open perils already includes it.
Earth movement and foundation repair sit in the same excluded group. A crack that opens because the soil moved is not a fire, and it is not a covered sudden discharge of water just because water was somewhere nearby. Ask the agent which foundation losses, if any, the form pays. We will not invent a dollar limit or a percentage.
Wind, trees, vacancy, and the coast
TDI says most home policies cover wind and hail except on the Gulf Coast, where wind and hail may be excluded. An open-perils rental policy can still exclude wind if the house is in a coastal area where the company will not take that risk. Confirm the wind box on the declarations. If wind is excluded, price a separate wind policy. Our windstorm guide explains that product. A hurricane can also bring flood, which this form does not cover.
Trees are a related trap. TDI’s disaster guidance says many policies pay when wind or hail knocks a tree into the house, and usually do not pay to remove a tree that only lands in the yard. The dwelling guide’s animal and wear exclusions are a different problem from a storm-fallen tree. Match the cause. A limb that rotted and fell on a calm day may be wear or neglect. A limb the wind put through the roof during a storm is the claim you describe to the adjuster with the weather, not with a guess.
Vacancy is not solved by buying a special form. TDI says policies often will not pay when a house is vacant beyond the number of days the policy specifies. Read that number. A rental between tenants is vacant on purpose. Tell the company. Some forms limit vandalism or water after that count. The special form does not erase the sentence.
How the building is paid, and what happens to the rent
TDI explains replacement cost as today’s price to repair, and actual cash value as that price minus depreciation. The roof example in the Texas home guide is simple: if a roof costs $10,000 to replace and the deductible is $2,000, a replacement-cost payment is $8,000. Actual cash value would start from a lower number because of age. Ask whether this DP-3 uses replacement cost on the dwelling, whether you must carry a limit close to the rebuild cost before that applies, and whether a roof schedule pays less because of age. If the form names a percentage, it will be printed. We are not supplying one.
Other structures, such as a detached garage or a fence, are part of the open-perils building coverage on the common special-form description. TDI’s disaster notes say other structures are often limited to a share of the dwelling amount, and fences are often settled at actual cash value. Ask for the dollar limit and the settlement method. A fence is easy to underinsure and easy to misunderstand.
Loss of rent is the landlord version of “I cannot use the property.” TDI describes additional living expenses as rent, food, and other costs you would not have had if you still lived in the home. On a house you rent out, ask whether the form pays lost rental income, extra living costs, both, or neither, and for how long. A special form can include loss of rent and still cap it. The cap belongs on the declarations.
Personal liability is separate from the building perils. TDI says it pays when you are responsible for injuring someone or for damaging someone else’s property, and it can pay court costs if you are sued. A guest, a tenant, or a contractor can be the injured person. Confirm liability is on this policy or on another one. Short-term rental is a second confirmation. TDI says most policies will not pay for damage or injuries during short-term rentals. A DP-3 written for a long-term tenant can exclude weekend stays even though the building is open perils.
The tenant, the deductible, and the claim file
If a covered loss damages the building, you claim it. If the same event ruins the tenant’s couch, that is their renters policy, which TDI says is not required unless the lease requires it. Put the requirement in the lease if you want them to carry it, and do not expect your DP-3 to replace their property. Appliances you own should be listed as your property so they are not mistaken for the tenant’s.
Deductibles still apply. Wind and hail in Texas are often a percentage of the dwelling limit, different from the dollar deductible on a kitchen fire. Read both numbers before you compare a DP-3 price with a DP-2 or a DP-1. A special form that costs more and carries a higher wind deductible is not automatically the better buy. It is the better buy when the open-perils wording covers a loss the named list would miss, at a deductible you can pay.
After a loss, make reasonable temporary repairs so the damage does not spread, keep receipts, and photograph the cause if you can do it safely. Neglect is a listed exclusion on the special-form description. Leaving a hole in the roof open through the next storm is how a covered loss grows into an argument. Do not start a full remodel before the company has seen the damage unless the form tells you that emergency work is allowed. Ask the claims number on the policy, not a general office line.
How to compare the three dwelling forms
- Confirm the dwelling and other structures are open perils, not a named list with a “special” label.
- Read the exclusion list: flood, backup, wear, repeated leakage, pests, earth movement, mold.
- See whether your own contents are still named perils, and what that list is.
- Confirm replacement cost, any roof schedule, and the rebuild limit.
- Find lost rent or extra living costs, the limit, and the time cap.
- Read the vacancy day count.
- On the coast, confirm wind is included or priced separately.
- Ask the lender if a mortgage requires an all-risk form.
- Tell the agent if anyone stays short term.
Texas Insurance Resources compares these forms through licensed agents. We do not adjust the claim and we do not replace the policy language. The landlord insurance guide is the wider starting point if the rental is one house in a larger set of questions about liability, loss of rent, and what the tenant should carry.
Get your free Texas DP-3 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.
What happens next
- A licensed Texas agent reviews your request.
- We compare carriers for your landlord / rental property coverage.
- You get options by phone or email, usually the same business day.
Sources
Texas shopping points come from TDI. Your form can differ.
Compare Texas DP-3 insurance
Put the special form next to a broad form at the same deductible. Request a comparison with a licensed agent.