Rhode Island Insurance Adjuster Exam

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What type of property does a DP-3 policy cover?

Single-family homes
Multi-family homes where the owner does not live on the property
Vacation homes
Commercial properties

The correct answer is: Multi-family homes where the owner does not live on the property

A DP-3 policy, also known as the Dwelling Property Form, specifically covers a wider range of residential properties that are considered to be not owner-occupied, such as multi-family homes where the owner does not reside on the property. This type of coverage is designed for landlords or investors who own rental properties, and it provides protection for the dwelling itself against a variety of risks, including but not limited to fire, lightning, and vandalism. While a DP-3 policy can indeed cover single-family homes and vacation homes under certain conditions, its primary focus is on properties that are not the owner’s primary residence, such as those rented out to tenants. Commercial properties fall outside the scope of coverage for a DP-3 policy, as these are typically insured under different types of commercial property insurance policies that cater specifically to business needs. The emphasis on non-owner-occupied structures makes the multi-family homes where the owner is absent the most accurate representation of the DP-3 coverage.