(800) 253-1482Tennessee DP1 Policy for Landlords
Summary: In Tennessee, a DP1 policy provides basic, low-cost coverage for landlords but comes with higher risks and lower reimbursement due to depreciation. Comparing your options, including a DP3 policy, can help you find the best protection for your rental home. Estimated Read Time: 3 mins
Tennessee landlords can save with a DP1 policy, which offers basic coverage at lower premiums but has limited protection.
Compare DP1 coverages with other options to understand the risks, get affordable quotes from top-rated insurers, and better protect your rental home.
Tennessee DP1 Policy Defined
Also known as Dwelling Fire Form 1, a DP1 policy is a basic form of Tennessee landlord insurance coverage protecting against nine specific perils.
This is a low-cost approach for landlords willing to accept more risk and also a way to cover unoccupied homes.
What Does a DP1 Insurance Policy Cover in Tennessee?
A DP1 policy provides landlords with protection against nine specific perils, covering damage from aircraft, explosions, fire, lightning, hail, riots, smoke, vehicles, volcanic explosions, and windstorms.
While these protections are essential, they do not cover all potential risks that rental properties in Tennessee may encounter.
It's crucial to explore additional coverage options and compare various landlord insurance policies to ensure your property is fully protected.
Talking to an insurance agent can help you better understand your risks and your options to protect your rental property.
Not Covered
While a DP1 policy will protect you from the nine perils listed above, there are several additional risks rental homes may face.
This includes things like frozen pipes, water damage, power surges, and theft. All of which aren’t protected by DP1 coverages.
If you want to get more protection, DP2 and DP3 policies may be a better option.
Be sure to take into account the risks facing your rental home, your risk tolerance, and your budget to find the appropriate type of landlord insurance for your needs.
TN DP1 Policies are Actual Cash Value (ACV)
DP1 policies use actual cash value (ACV) for reimbursements, which accounts for depreciation.
This means that you'll receive a lower reimbursement when filing a claim, as depreciation will be subtracted from the amount you'll use to restore your loss.
For example, if your rental home suffers roof damage costing $12,000 but has depreciated by $5,000, you'll only get $7,000.
This means the remaining $5,000 will need to come out of your own pocket.
While premiums are lower, ACV can make it harder to fully restore losses, and landlords should be aware that other landlord insurance policies are available and capable of providing better compensation after a loss.
DP1 vs. DP3 Insurance Policies in Tennessee
DP1 and DP3 landlord insurance differ in key ways, which landlords in Tennessee should be aware of when shopping for coverage.
For example, DP1 policies have lower premiums but cover fewer perils, as they only protect against specifically named risks.
In contrast, DP3 policies cover more perils on an open basis, unless specifically excluded.
Additionally, DP1 policies reimburse losses based on ACV, which factors in depreciation, leading to lower payouts.
DP3 policies use replacement cost value (RCV), offering higher reimbursement without accounting for depreciation, and allowing full restoration of your property.
The bottom line is that if you have a rental home and need fuller protection, DP3 policies offer more coverage but also cost more in premium.
Get Quotes for DP1 Policies in Tennessee
As a Tennessee landlord, protecting your investment is crucial. At Freedom Insurance Group, we partner with top-rated insurers to offer reliable coverage at competitive prices.
Our agents can help you compare DP1 policy options and other landlord insurance policies to find the best protection. Contact us today or use our free landlord insurance quote tool to quickly compare multiple carriers.
