Homeowners DP1 & DP3 Insurance Policies
DP1 and DP3, are the two types of basic policy on file with the State of Florida Insurance Department and available to short-term-rental homeowners. The selection of cover then determines the policy issued and to some degree the insurer.
DP1: covers losses at Actual Cash Value (ACV) rather than the more favorable Replacement Cost (RC). The basic difference is depreciation. ACV takes into account the annual depreciation; RC replaces the item with new. The DP1 covers the following specific perils: Fire, lightning, explosion, wind & hail, smoke, aircraft, riot & looting, vandalism, sprinkler leakage, sinkhole collapse, volcano/lava.
DP3: adds everything else to the perils covered in a DP1 unless it is specifically excluded: like earthquake and flood, in Florida. A DP3 covers a loss at RC, as opposed to ACV. In brief, the DP3 is?the far more comprehensive policy, and therefore? more desirable, but?obviously more expensive!