The one-paragraph answer
Live in the home yourself? You buy an HO-3, the standard homeowners package — dwelling, belongings, loss of use, and liability in one contract. Rent it to a tenant? The home belongs on a DP-3, the dwelling fire form built for non-owner-occupied houses. Both cover the structure open-perils, and both cover fire — including wildfire. The difference is the rest of the package: a DP-3 includes no personal property by default, pays fair rental value instead of loss of use, and treats liability as an optional add-on rather than a built-in. Our quote wizard asks about occupancy up front and routes landlords to the DP-3 track automatically, so you can't accidentally price the wrong form.
| HO-3 (owner-occupied) | DP-3 (tenant-occupied) | |
|---|---|---|
| Who lives there | You — it's your primary residence | A tenant (vacant homes are a third category) |
| The structure | Open perils — covered unless excluded | Open perils — same logic |
| Personal property | Included, typically 50–70% of Coverage A | Not included by default; a limit is added for landlord-owned items |
| If the home is uninhabitable | Loss of use — your hotel and extra living costs | Fair rental value — the rent you're losing |
| Liability | Built in — $100k/$300k/$500k options | Optional premises-liability add-on you elect |
| Medical payments | Built in | Optional |
| Who buys it | Homeowners | Landlords and investors — see the landlord guide |
What a DP-3 leaves out — on purpose
The DP-3 isn't a stripped-down HO-3; it's a form built for a different economic relationship with the house. Start with contents: your tenant's belongings were never yours to insure — that's what a renters policy is for — so the DP-3 includes no personal property coverage by default. If you're renting the home furnished, or you own the appliances, window coverings, and the mower in the garage, you add a contents limit sized to those specific items.
Liability works the same way. On an HO-3, Coverage E is baked in. On a DP-3, premises liability is an election. We treat it as non-negotiable on every landlord placement — a tenant's guest tripping on a porch step is a lawsuit aimed at the property owner — and for landlords with real assets, an umbrella policy stacked above the DP-3's liability is usually the better answer than a high underlying limit alone. The full landlord playbook, including tenant-vs-vacant wrinkles, lives in our DP-3 guide for landlords.
Fair rental value vs loss of use
When a covered loss makes an owner-occupied home unlivable, the HO-3's Coverage D pays the owner's displacement costs — rent on a comparable place, the extra costs of living out of a suitcase — typically capped at 20–30% of Coverage A or a time limit. A landlord doesn't have that loss. Their loss is a rent check that stops arriving while the house is rebuilt.
So the DP-3 substitutes fair rental value: it replaces the rental income the property would have produced while it's uninhabitable from a covered loss. It's the difference between insuring where you sleep and insuring a cash flow — and it's a good illustration of why the forms aren't interchangeable. Each one pays for the loss its intended owner actually suffers.
Why occupancy honesty is the whole game
Every application asks how the home is occupied, and the carrier prices and issues the policy on that answer. Keeping an HO-3 on a house a tenant lives in — usually to save the hassle of switching, sometimes on bad advice — is a material misrepresentation, and it hands the carrier grounds to deny a claim or rescind the policy entirely. This is not a paperwork technicality. Occupancy is one of the first things an adjuster establishes after a serious loss, because the person standing in front of the burned house is the person who lives there.
The fix costs almost nothing: when your situation changes, tell your broker. Moving out and keeping the house as a rental is a routine mid-term conversation — the HO-3 comes off, a DP-3 goes on, and coverage continues without a gap. What doesn't work is hoping nobody asks.
The wizard sorts this for you
The first questions in our quote flow establish occupancy. Owner-occupied homes price as HO-3s; rentals route automatically to the DP-3 track with fair rental value and premises liability in the conversation from the start. Four minutes either way, and the form is right by construction.
See it priced for your home
Four minutes to a live HO-3 indication — then sign the real ACORD 80 online.
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Get a pricing indication →The in-between cases
Occupancy isn't always a clean either/or, and the edge cases each have their own answer:
Nobody lives there. A house sitting empty — between tenants for an extended stretch, mid-renovation, or tied up in an estate — is a third category entirely. Vacancy changes the risk profile enough that carriers restrict or exclude key perils, and it calls for a vacant-home policy, not a quiet continuation of whatever was in force.
Short-term rentals. Occasional hosting is a disclosure conversation; running the home as a business-level listing pushes you past what either form contemplates. The Airbnb and short-term rental guide walks through the options.
Second homes you occupy part-time. Still owner-occupied — that's HO-3 territory with seasonal underwriting wrinkles, covered in the seasonal and second home guide.
A roommate or rented room while you live there. Usually still an HO-3, but it belongs on the application. Disclose it and let your broker match the situation to the carrier's rules.
Frequently asked
Does a DP-3 cover wildfire?
Yes. The DP-3 grew out of the dwelling fire form — fire, including wildfire, is core to what it covers, and the structure is covered open-perils just like an HO-3. In brush-heavy areas the challenge is carrier appetite, not policy language, which is the same shopping problem owner-occupied homes face.
Can I keep my HO-3 if I only rent the house out for a while?
Talk to your broker before the tenant moves in — "for a while" is exactly the situation carriers ask about. Tenant occupancy generally means the DP-3 is the right form, and switching is routine and gap-free. Guessing wrong quietly is the expensive version.
Is a DP-3 cheaper because it covers less?
Not reliably — it covers less, but a tenant-occupied house is a different risk, and carriers price accordingly. The honest answer is that the spread between carriers matters more than the form: we routinely see identical homes priced 20–40% apart by carrier. Shop the market and let real numbers decide.
What about a condo I rent out?
Condos follow their own form logic — the association's master policy insures the building, so a rented-out unit is a conversation about the condo forms and tenant occupancy together. Start with HO-3 vs HO-6, then tell your broker it's tenant-occupied.