Which coverage is a significant difference between TDP 3 and HO policies?

The significant difference between Texas Department of Insurance (TDI) TDP 3 policies and Homeowners (HO) policies lies in the coverage for rental income. TDP 3 policies are specifically tailored for tenancies and provide coverage that may include provisions for rental income in the event that a rental property becomes uninhabitable due to a covered loss. This is an essential aspect for property owners who rely on rental income as part of their financing.

Homeowners policies, on the other hand, are designed primarily for owner-occupied residences and generally do not encompass coverage for lost rental income, as this type of income is not typically associated with single-family homes that the HO policies cover. Therefore, tenants or property owners may find it crucial to assess the distinctions in coverage provided by these policies, especially when considering the financial implications of rental income in the event of property damage.