By Ben Mauldin, Licensed Insurance Agent | SC Resident Producer License #21612911

If you own a rental property in South Carolina, the policy protecting that investment matters more than most people realize. The wrong policy can leave you exposed in ways you won't notice until you file a claim. The right one keeps your investment intact and your rental income flowing while repairs are made.

This guide walks through what a DP-3 dwelling fire policy actually covers, why it's the right fit for most landlords in the Midlands, and what to do when something goes wrong, including the situation I get the most calls about: a property that's been damaged by fire and suddenly nobody wants to write coverage on it.

Why a Standard Homeowners Policy Doesn't Work for Rentals

If you rent out a property you own, your standard HO-3 homeowners policy isn't built for it. HO-3 policies are designed for owner-occupied homes. The moment tenants move in and you move out, the risk profile changes. Insurance carriers know it. Some won't honor an HO-3 claim on a rental, and others will cancel the policy outright once they find out the property isn't your primary residence.

That's where dwelling fire policies come in. They're built specifically for non-owner-occupied homes, including long-term rentals, short-term rentals, vacation homes, and properties between tenants.

There are three main types: DP-1, DP-2, and DP-3. Most South Carolina landlords end up on a DP-3, and there's a good reason for it.

What a DP-3 Policy Actually Covers

A DP-3 is the most comprehensive dwelling fire policy available. It's written on what the industry calls an "open perils" basis, which is a fancy way of saying it covers anything that happens to your property except for the specific things the policy excludes. That's the opposite of "named perils" policies (DP-1 and DP-2), which only cover the specific events listed in the contract.

Open perils matters. With a DP-1, if water damage from a burst pipe happens and burst pipes aren't on the named list, you're paying out of pocket. With a DP-3, the carrier has to prove the cause of damage was specifically excluded before they can deny the claim. That shifts the burden in your favor.

A standard DP-3 in South Carolina typically includes:

• Dwelling coverage for the structure itself, paid at replacement cost (meaning the policy pays what it actually costs to rebuild today, not the depreciated value).
• Other structures coverage for detached buildings like garages, sheds, and fences.
• Fair rental value coverage (also called loss of rents), which replaces the rental income you lose while the property is being repaired after a covered loss.
• Personal property coverage for items you own that are kept at the property to service it (appliances, lawn equipment, maintenance tools). This does not cover your tenant's belongings. Tenants need their own renters insurance for that.
• Personal liability coverage, usually optional but strongly recommended, which protects you if a tenant or guest is injured on the property and sues.

What's typically excluded: floods, earthquakes, ordinance or law (the cost to bring an older home up to current building code during repairs), and intentional damage. Floods and earthquakes can be added with separate endorsements or standalone policies. Ordinance or law coverage is one of the most common gaps I see in DP-3 policies, especially on older homes in places like Cayce, West Columbia, and the older parts of Lexington. If your rental was built in the 1960s and a covered fire damages it, your DP-3 might pay to rebuild it the way it was, but local code may require updates that your policy won't cover unless you've added the endorsement.

Why DP-3 Is the Right Fit for Most Midlands Landlords

I write a lot of dwelling fire policies for property owners across Lexington County, Richland County, and the surrounding Midlands. For most of them, DP-3 is the answer.

Here's why: A DP-1 policy looks attractive on price. It's the cheapest of the three. But when something goes wrong, the actual cash value settlement (which deducts depreciation) often leaves the owner short by thousands. A 15-year-old roof damaged in a hailstorm under a DP-1 might pay out 40 to 50 percent of what a new roof actually costs. The owner is on the hook for the rest.

A DP-3 pays replacement cost. Same hailstorm, same roof, full payout to actually replace it. The premium difference is usually $20 to $50 per month for most single-family rentals in the Midlands, and that math almost always works out in the landlord's favor over the life of the property.

The other piece is loss of rent coverage. If your tenant has to move out for three months while the property is being rebuilt after a fire, a DP-3 keeps your rental income flowing during that time. For landlords whose mortgages depend on rental income, that coverage isn't optional. It's essential.

Now Here's the Hard Part: When Your Property Has Already Been Damaged by Fire

This is where most of my phone calls come from.

A property owner has had a fire. The damage might be partial (a kitchen fire, an electrical fire, a tenant who left a candle burning) or it might be a total loss. They've filed the claim, the claim has been paid, repairs are either underway or complete, and now they need to put a new policy in place or renew their current one.

And suddenly, nobody wants to write it.

Here's what's actually happening behind the scenes. Standard insurance carriers (the big national names you see advertising on TV) use automated underwriting systems that flag any property with a recent claim, especially a fire claim. Even after the property is fully repaired and inspection-ready, the prior loss stays on a database called CLUE (Comprehensive Loss Underwriting Exchange) for five to seven years. The standard market sees the CLUE report, sees "fire," and the system declines automatically.

This isn't because your property is unsafe. It isn't because you did anything wrong. It's because standard carriers price their policies for properties with clean loss histories, and one fire claim makes you no longer fit their box.

What You Can Actually Do About It

This is where having a local, independent agent who knows the non-standard market becomes the difference between getting your property insured and being stuck.

Standard carriers (the big national names) write the bulk of policies in South Carolina. When they decline, you don't go without coverage. You move into what's called the non-standard or surplus lines market.

Surplus lines carriers are insurance companies that specialize in writing risks the standard market won't touch. They underwrite differently, they price differently, and they're built for exactly the situation you're in. Some will write a property six months after a fire if repairs are documented and a current inspection passes. Others want 12 to 24 months of clean ownership post-claim. Some specialize in coastal markets, others in inland properties. Knowing which carrier to approach first, and how to package the submission, is half the work.

For properties that genuinely can't find coverage anywhere else, South Carolina also has residual market mechanisms designed as a last-resort backstop. These should not be the first stop, but they exist for a reason and I've placed coverage there when it was the right call.

What to Have Ready When You Call Me About a Fire-Damaged Property

If you're dealing with this situation right now, here's what speeds up the process:

1. The original claim documentation, including the date of loss, cause of fire, and total claim payout.
2. Receipts and contractor documentation showing what was repaired or replaced.
3. A current photo set of the property, inside and out, post-repair.
4. Any inspection reports (a recent four-point inspection or a fire department clearance is gold).
5. The property address, square footage, year built, and current rental status (vacant, occupied, between tenants).

With that in hand, I can usually have quotes from multiple markets within 48 to 72 hours. Premium will almost always be higher than the property had pre-fire, sometimes 40 to 75 percent higher in the first year, but rates typically come back down after 24 to 36 months of clean loss history.

The goal isn't just to get you covered today. It's to get you covered today, document your loss history cleanly going forward, and get you back to standard-market pricing as fast as possible.

Why a Local Independent Agent Beats a 1-800 Number Every Time

The captive agents at the big national carriers can only sell you what their company writes. If their carrier declines your fire-damaged rental, the conversation ends there. They'll wish you luck and you'll move on.

An independent agent works for you, not the carrier. I have access to multiple markets across South Carolina, including the standard market, the surplus lines market, and specialty programs through my networks. When one carrier declines, I move to the next. And the next. Until I find a fit.

I also know the South Carolina market specifically. I know which types of carriers are aggressive in Lexington County, which ones have pulled back coverage in certain zip codes, which ones are friendly to dwelling policies on older homes in the Midlands, and which ones will look at short-term rental properties around places like Lake Murray. That local knowledge isn't something an out-of-state call center can match.

Let's Talk About Your Rental Property

If you own a rental property in South Carolina and want to make sure you have the right coverage in place, reach out. If you've had a fire or other major claim and you're getting declined, I can help. This is exactly the kind of situation independent agents like me are built for.

You can call or text me directly at (803) 920-8827, or reach the agency through mauldininsurancegroup.com. I'll pull quotes from the right markets for your situation and walk you through the differences so you can make an informed decision.

We're based in Lexington and serve property owners across the Midlands and statewide.

Frequently Asked Questions

Is a DP-3 policy required by my mortgage lender?

Most lenders require some form of dwelling fire insurance on a non-owner-occupied property. A DP-3 satisfies that requirement, and most lenders prefer it because it provides replacement cost coverage rather than actual cash value.

Can I put a DP-3 policy on a vacant property?

Sometimes, but vacancy creates additional underwriting issues. Most carriers require properties to be occupied or in active rental status. If your property is vacant for more than 30 to 60 days, a vacant home policy may be a better fit. Talk to me before letting a property sit empty without notifying your carrier, since most policies have vacancy clauses that can void coverage at the worst possible time.

Does a DP-3 cover my tenant's belongings?

No. A DP-3 covers the structure and items you own at the property to service it. Your tenant's furniture, electronics, clothing, and personal items are not covered. Renters insurance is what covers those, and many landlords (smartly) require tenants to carry it as part of the lease.

How much does a DP-3 policy cost in South Carolina?

It varies widely. For a typical single-family rental in the Midlands, premiums generally run from $900 to $2,000 per year, depending on property age, construction type, location, coverage limits, and loss history. Properties with prior claims or in higher-risk zip codes will run higher. Properties with recent fire damage may run 40 to 75 percent above standard rates until the loss ages off.

Will a fire claim affect my ability to get coverage on my other properties?

It can. Some carriers underwrite based on your overall loss history across all properties you own. If you have multiple rentals and one has a fire, your other policies could see rate increases at renewal, or in rare cases, non-renewal. This is another reason to work with an independent agent who can place each property with the carrier most likely to keep coverage in force long-term.

About the Author

Ben Mauldin is the co-owner of Mauldin Insurance Group in Lexington, SC, an independent agency he runs with his wife Jennifer. He holds South Carolina Resident Producer License #21612911 (Life, Accident & Health, and Property & Casualty). The agency writes home, auto, life, dental and vision, Medicare, and commercial insurance for clients across the Midlands and statewide. Before insurance, Ben spent years in regional planning at the Central Midlands Council of Governments. He serves on the boards of Our Place of Hope and the Midlands Workforce Development Board, and drives transport for the South Carolina Youth Advocate Program in his spare time.