Investment Property Insurance Quote
DP-1 vs. DP-3: Choosing the Right Policy for Your Investment Property
When it comes to insuring a rental or investment property in Alabama, Georgia, or Tennessee, the single biggest decision you'll make is between a DP-1 and a DP-3 policy — and the difference is enormous. A DP-1 (Dwelling Fire Form 1) is a named-peril policy that only covers losses specifically listed in the policy — typically fire, lightning, explosion, and windstorm. Everything else, including water damage, theft, and vandalism, is excluded unless explicitly added. A DP-3 (Dwelling Fire Form 3) is an open-peril policy that covers all causes of loss except those specifically excluded. For most investment properties, a DP-3 provides dramatically broader protection and is the standard recommendation. TCDS Insurance Agency is a licensed independent insurance agency serving AL, GA, and TN, and we shop 50+ carriers to find the right investment property policy for your portfolio. Quotes are always free.
What a Landlord Policy Actually Covers
A proper DP-3 landlord policy covers more than just the structure. Key coverage components include:
- Dwelling coverage — Pays to repair or rebuild the structure after a covered loss. Should be written at full replacement cost, not actual cash value, to avoid a depreciation penalty at claim time.
- Other structures — Covers detached garages, storage sheds, fences, and outbuildings on the property.
- Landlord liability — Pays bodily injury and property damage claims when a tenant or visitor is injured on your property due to a condition you're responsible for. Standard limits of $100,000–$300,000 are common; umbrella policies can add additional layers above that.
- Loss of rents coverage — Pays the rental income you lose while the property is uninhabitable due to a covered loss. Typically covers 12 months of fair rental value. This coverage is often overlooked and critically important.
What a Landlord Policy Does NOT Cover
A DP-3 landlord policy covers your property and your liability — it does not cover your tenant's belongings. If a fire destroys a tenant's furniture, clothing, and electronics, that's their loss unless they carry a renters insurance policy (HO-4). Many landlords in Alabama, Georgia, and Tennessee now require tenants to carry renters insurance as a lease condition, which is a sound risk management practice. Additionally, most standard DP-3 policies exclude losses that occur during a vacancy period — typically defined as 30–60 consecutive days with no tenant in residence. If your property sits empty between tenants for more than that window, you may need a vacancy endorsement or a separate vacant property policy to maintain coverage.
Short-Term Rentals: A Critical Exclusion to Know
If you rent your property on Airbnb, VRBO, or any short-term rental platform, a standard DP-3 policy almost certainly excludes those losses. Short-term rental activity changes the risk profile of a property in the eyes of underwriters — higher turnover, guests who don't treat the property as their own, and different liability exposures all factor in. Several specialty carriers offer short-term rental endorsements or standalone STR policies; TCDS can help you identify the right solution if any part of your investment portfolio involves short-term rental activity.
Investment Property Insurance Costs in AL, GA, and TN
Investment property insurance typically runs between $900 and $2,400 per year depending on the dwelling's replacement cost value, location, construction type, and coverage selections. Older homes with outdated electrical, plumbing, or roofing systems may carry surcharges or face coverage restrictions. Properties in coastal or flood-prone areas of Alabama may require separate flood insurance in addition to the DP-3 policy.
Let TCDS Shop 50+ Carriers for Your Rental Property
TCDS Insurance Agency is an independent agency — not a captive agent for any single carrier. We compare investment property policies across 50+ insurance companies to find the right combination of price, coverage, and claims service for your rental portfolio in Alabama, Georgia, and Tennessee.
Contact TCDS today for a free investment property insurance quote. Whether you own one rental home or a multi-property portfolio, we'll find coverage that protects your income and your assets.