Glossary

Difference in conditions (DIC) policy

A separate policy built to sit beside a primary policy and pay for perils and coverages the primary one leaves out, such as theft, water damage and liability.

Also called: DIC, DIC policy, difference in conditions policy, difference in conditions insurance

A difference in conditions policy covers the difference between what a primary policy pays and what the homeowner actually needs. It is not a replacement for the primary policy. It is written to run alongside it and respond to causes of loss the primary leaves out.

For homeowners, the usual pairing is with a FAIR plan policy. Many plans insure only fire and a short list of other perils, and may leave out theft, water damage and personal liability. A DIC policy, frequently written in the surplus lines market, adds those. Some DIC forms cover on an open-perils basis, and many are written to leave fire to the plan. Say a pipe bursts inside a wall and your plan policy excludes water damage: the claim goes to the DIC policy, subject to its own deductible. A kitchen fire goes the other way, to the plan.

Two separate policies mean two premiums, two deductibles and two sets of terms, and they are not standardized the way an HO-3 is. Read how each describes its relationship to the other, ask who pays for losses involving more than one cause, and confirm your lender's evidence-of-insurance requirements are met by the combination.

The DIC guide explains how to build the pairing, and the California FAIR Plan shows the gap it fills.

Last reviewed October 10, 2026

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Related terms

FAIR plan A state pool, funded by the insurers doing business there, that sells basic property coverage to owners who cannot find it in the regular market. Surplus lines insurer An insurer not licensed in a state that may write risks the standard market declines, with freer rates and forms and usually no guaranty fund backing. Excess and surplus lines The specialty market where non-admitted insurers cover unusual, high-hazard or hard-to-place risks that standard carriers will not write at filed rates. Named perils Coverage that applies only to the causes of loss listed in the policy, so a claim is paid only if the damage came from one of them. Open perils Coverage that applies to any direct physical loss unless the policy specifically excludes the cause, so the insurer must point to an exclusion to deny a claim. Residual market The state-created plans and pools that cover property owners the private market declines, as opposed to coverage insurers sell by choice.

Related guides

The California FAIR Plan explained What the California FAIR Plan covers and leaves out, how to pair it with a DIC policy, how it is funded, and how to move back to a regular insurer. California's home insurance crisis Why California homeowners lost coverage, how the FAIR Plan became a major insurer, and what to do if you are dropped. Facts as of October 2026. Colorado home insurance: hail and wildfire Why Colorado home insurance is costly, how hail and wildfire shape premiums, and what state rules on wildfire losses, the FAIR Plan and roof grants mean. Difference in conditions policies to pair with a FAIR plan A difference in conditions (DIC) policy adds the water, theft and liability coverage a FAIR plan leaves out. How the pairing works and where it can fail. Does homeowners insurance cover wildfire? Wildfire is covered as fire under a homeowners policy. Gaps to check: dwelling limits, code upgrades, wildfire deductibles, FAIR Plan forms and mudflow. Dwelling fire policies: DP-1, DP-2 and DP-3 Dwelling fire forms insure a rental, a vacant house or a home that can't get a homeowners policy. DP-1 is basic, DP-2 broad, DP-3 open perils. No liability.

Related insurers

Bamboo Insurance Utah-based MGA founded in 2017 that writes California and Texas homeowners policies, mainly issued by Sutton National; controlled by CVC since 2025. California FAIR Plan California's insurer of last resort, a pool of all licensed property insurers selling basic fire policies; 696,562 policies in force in June 2026. Chubb The largest U.S. insurer of high-value homes, sold through independent agents and brokers; ranked 8th among U.S. home insurers by 2025 premiums. DB Insurance (U.S. Branch) U.S. branch of South Korea's DB Insurance, writing homeowners in California through the Aegis General program, plus Hawaii, New York, New Jersey and Guam. US Coastal Insurance (Cabrillo Coastal) Two coastal homeowners insurers, one in New York and one in Florida (also writing in California), run by Cabrillo Coastal and sold through agents; Demotech A.

Related tools

Nonrenewal action plan Turn a nonrenewal notice into a dated plan: what to do now, where to look for coverage, and what your state offers when no private insurer will write you.