A Difference in Conditions (DIC) policy exists to close the coverage gaps left by a limited policy such as the California FAIR Plan. Because FAIR Plan policies generally cover only fire-related perils, homeowners are left exposed to a long list of other risks: theft, vandalism, liability claims, water damage, and more.
A DIC policy is designed specifically to fill in those missing pieces. When paired with a FAIR Plan policy, the two together are meant to approximate the broad protection of a standard homeowners policy. Without a DIC policy, a FAIR Plan policyholder could suffer a covered loss, such as a burglary or a liability claim from a visitor’s injury, and find they have no coverage at all for it.
DIC coverage is especially important for homeowners in wildfire-prone areas who were pushed into the FAIR Plan after losing standard coverage. Skipping the DIC policy to save on premium can leave a dangerous gap that only becomes apparent after a loss occurs.
If you currently hold a FAIR Plan policy without a companion DIC policy, it’s worth a conversation with your agent to understand exactly what isn’t covered, and to close that gap before you need to file a claim.