What dwelling fire insurance covers in South Carolina
If you own a rental property, a second home, or a vacant house along the Grand Strand or anywhere else in South Carolina, dwelling fire insurance is almost certainly the policy you need rather than a standard homeowners policy. Most people have never heard of it until a claim gets denied because they had the wrong coverage in place. Understanding what this policy does and does not cover can prevent a very expensive mistake.
A dwelling fire policy (sometimes called a DP policy) is designed specifically for properties the owner does not occupy as a primary residence. It covers the structure itself, and depending on which form you choose, it may also cover other structures on the property, loss of rental income, and liability. It is not a homeowners policy. Homeowners policies (HO-3 and similar forms) are written for owner-occupied residences and carry assumptions about how the property is used. Put a tenant in the house or leave it vacant for more than 30 to 60 days and your homeowners carrier can deny a claim or cancel the policy entirely.
South Carolina's coastal geography makes this particularly relevant. Properties in Horry, Georgetown, and surrounding counties are often used as long-term rentals, vacation rentals, or seasonal second homes. Each of those uses carries a different risk profile, and matching the right policy form to the right use is the first job of a knowledgeable agent.
The three dwelling fire forms: DP-1, DP-2, and DP-3
Dwelling fire policies come in three forms, and the difference between them is substantial. Choosing the wrong one is not a minor detail.
- DP-1 (Basic Form) : This is the most limited option. It covers a short list of named perils: fire, lightning, and internal explosion. Some carriers add a few more perils by endorsement, but the base form is bare-bones. It also pays on an actual cash value (ACV) basis, meaning depreciation is deducted from your claim payment. A 15-year-old roof is not worth what it cost to install. DP-1 is generally used for vacant or distressed properties where broader coverage is unavailable.
- DP-2 (Broad Form) : This form covers a longer list of named perils, including windstorm, hail, vandalism, and falling objects. It can be written on a replacement cost basis, which is a significant upgrade over DP-1. For a livable rental property in decent condition, DP-2 is often a reasonable starting point.
- DP-3 (Special Form) : This is the most comprehensive and most commonly recommended form. Instead of listing covered perils, it covers all risks to the structure except those specifically excluded. That open-perils approach gives landlords broader protection and fewer gaps. If you own a rental property that tenants keep in good condition, a DP-3 written on a replacement cost basis is typically the right answer.
The right form depends on the property's condition, its occupancy status, and what you can afford to absorb out of pocket if something goes wrong. An independent agent can compare how multiple carriers price each form for your specific address, which matters considerably in South Carolina's coastal counties where wind and hail exposure drive significant rate differences.
What landlords in South Carolina need to think about
Owning a rental property in South Carolina comes with a specific set of risks that a dwelling fire policy is built to address. The coverage components below matter most for landlords in this state.
Coverage A: the dwelling itself
This covers the physical structure. You need to insure it for its replacement cost , not its market value. In coastal markets like Myrtle Beach or Pawleys Island, market value and replacement cost can differ by a wide margin. Underinsuring the structure means you absorb the gap out of pocket after a major loss.
Coverage B: other structures
Detached garages, fences, sheds, and similar structures can be covered under Coverage B, typically as a percentage of Coverage A. If the property has structures that add real value, confirm they are included and that the sublimit is adequate.
Coverage D: fair rental value
If the property becomes uninhabitable because of a covered loss, Coverage D replaces the rental income you lose during the repair period. This is not automatic on every form or with every carrier. For landlords who depend on rental income to cover the mortgage, this coverage is not optional. Check the limit carefully: it should reflect your actual monthly rent, not a generic estimate.
Liability protection
A standard DP policy often includes limited liability coverage or none at all. As a landlord, you have real liability exposure if a tenant or visitor is injured on the property. Many landlords address this through a separate landlord insurance policy that bundles property and liability coverage, or by adding a personal umbrella policy on top of a DP policy. Either approach can work, but going without liability coverage on a rental property is a significant gap.
Dwelling fire insurance vs. landlord insurance: what is the difference
You will hear both terms when you start shopping coverage for a rental property, and they are not exactly the same thing. A dwelling fire policy is the policy form; it describes the structure of the coverage. Landlord insurance is a broader product that typically wraps a DP-3 form together with liability coverage and sometimes additional protections like loss of rents and landlord-specific endorsements.
For most landlords renting to long-term tenants, a landlord policy is the cleaner solution because it handles property and liability in one package. For a vacant property or one you are not yet ready to rent, a DP-1 or DP-2 may be the only product available until the property qualifies for broader coverage. The landlord insurance guide for South Carolina on this site goes deeper on how those products compare if you want more detail.
One thing that does not change: your tenants need their own renters insurance. Your dwelling fire or landlord policy covers the structure, not your tenants' belongings. Requiring renters insurance in your lease protects tenants and reduces friction when small losses happen.
Flood, wind, and South Carolina coastal exposure
No dwelling fire policy, regardless of form, covers flood damage. This is a common point of confusion that leads to real financial pain after a storm. South Carolina has thousands of rental properties in FEMA-designated flood zones, particularly in Horry and Georgetown counties. If your rental property is in or near a flood zone, you need a separate flood policy, either through the National Flood Insurance Program (NFIP) or a private flood carrier.
Wind coverage works differently. Most DP-2 and DP-3 policies do cover windstorm and hail, which matters given South Carolina's hurricane exposure. However, properties in certain coastal tiers may face a separate wind and hail deductible, often expressed as a percentage of Coverage A rather than a flat dollar amount. A 2% wind deductible on a $300,000 dwelling means you absorb the first $6,000 of a wind or hail claim out of pocket. Know your deductible before a storm makes that number real.
For properties in the highest-risk coastal zones, some carriers limit wind coverage or exclude it entirely, pushing coverage into the South Carolina Wind and Hail Underwriting Association (SCWHUA). That is worth knowing upfront when you are pricing a purchase or refinancing. Our post on hurricane season coverage in South Carolina covers this in more depth.
Vacant property: a separate situation entirely
Vacancy changes almost everything about how a property is insured. Most standard homeowners and landlord policies define vacancy as the property being unoccupied for 30 to 60 consecutive days and include a vacancy clause that restricts or voids coverage beyond that threshold. A property sitting between tenants, a home being renovated, or an inherited property that has not yet been sold can suddenly fall into a coverage gap.
For these situations, a DP-1 is often the first option carriers will write, or a dedicated vacant home insurance policy. Coverage is narrower and premiums are higher relative to occupied-property policies, but it keeps the asset protected while the situation resolves. If you have a property sitting vacant now and you are relying on a homeowners policy written for owner-occupied use, it is worth reviewing your policy language before something happens.
Short-term rental properties: a note for Airbnb and VRBO owners
South Carolina's coast draws a strong short-term rental market, especially in Myrtle Beach, Garden City, Surfside Beach, and Pawleys Island. If you rent your property on Airbnb, VRBO, or a similar platform for any portion of the year, a standard dwelling fire policy may not respond to losses that occur during a rental period.
Short-term rental exposure sits in an awkward gap between personal homeowners coverage and commercial hospitality coverage. Some carriers now offer endorsements or standalone products designed specifically for short-term rental hosts. A dedicated short-term rental policy or a host protection endorsement is the cleaner answer than hoping a standard DP policy will cover a guest's injury or a rental-period fire. Do not assume the platform's host guarantee substitutes for real insurance; it does not.
How L. W. Short Insurance Agency can help
Shopping for dwelling fire insurance in South Carolina is not a one-carrier exercise. Rates, form availability, and underwriting appetites vary significantly from one company to the next, especially for properties in coastal Horry and Georgetown counties where wind exposure is a real factor. As an independent agency, L. W. Short Insurance Agency works with multiple carriers and can compare options across all three DP forms to find the coverage that fits your property and your budget.
Whether you own a single rental cottage in Murrells Inlet, a small portfolio of properties in Conway, or a vacation home on Litchfield Beach that sits vacant part of the year, we can help you put the right policy in place. The wrong coverage costs you nothing until it costs you everything.
Call us at (843) 357-7493 or reach out through our contact page to talk through your rental property coverage. We are a local independent agency serving the Grand Strand and surrounding communities, and we are glad to walk you through your options without any pressure to buy.
