California · difference in conditions

DIC Insurance in California: What a Difference in Conditions Policy Covers

Q: Does a DIC policy cover wildfire damage?

Generally no, and it is not meant to, because fire is what the FAIR Plan policy underneath it covers. The DIC policy handles the non-fire perils the FAIR Plan excludes. In a fire loss the two usually work together, with the FAIR Plan responding for the structure and the DIC policy covering elements such as loss of use.

Q: Do I pay two deductibles with FAIR Plan and DIC?

Potentially yes. They are separate policies with separate deductibles, so a single event that triggers both may mean paying both. Which policy responds depends on the cause of loss.

If you are on the California FAIR Plan without a DIC policy, you have fire coverage and essentially nothing else — no water damage, no theft, no liability, no loss of use. Roughly half of FAIR Plan policyholders are in exactly that position, many without knowing it.

The short answer

What is a DIC insurance policy?

A Difference in Conditions (DIC) policy is a separate policy from a separate carrier that wraps around a fire-only policy to cover what it excludes: principally water damage, theft, personal liability and loss of use. The name describes the job. It insures the difference between what your existing policy covers and what a full policy would.

It is not sold by the FAIR Plan, because the FAIR Plan does not sell it. The California Department of Insurance maintains a list of insurers that write DIC coverage, and you place it through a broker.

Expect roughly 25% to 60% of the FAIR Plan premium on top, commonly. That combined figure — not the FAIR Plan premium alone — is what you should compare against any other quote.

The concept

What “difference in conditions” actually means

The name describes the job precisely, once you unpack it: it insures the difference between the conditions your existing policy covers and the conditions a full policy would.

A California FAIR Plan dwelling policy is a named-peril fire policy. It covers fire, lightning, internal explosion and smoke. Those are the conditions it insures. Everything else that a standard homeowners policy would have handled is simply absent — not limited, not sub-limited, absent.

A DIC policy is written to sit on top of that and fill the space. It is a genuinely separate contract, with its own carrier, its own premium, its own deductible and its own renewal date. That independence is the source of most of the practical problems people run into with it, and most of this page is about managing them.

Terminology: you will see the same thing called a DIC policy, a DIC wrap, a wrap-around policy or simply the wrap. These all describe the same arrangement. “DIC” also appears in commercial insurance meaning something related but distinct — a policy filling gaps in earthquake or flood coverage — so in a commercial context, confirm which sense is meant.

The gap it fills

What you have with and without one

The clearest way to see the point of a DIC policy is to look at what a FAIR Plan policy leaves uncovered.

	FAIR Plan alone	FAIR Plan + DIC	Standard homeowners
Fire, lightning, smoke	Covered	Covered	Covered
Water damage (burst pipe)	No	Typically yes	Typically yes
Theft	No	Typically yes	Typically yes
Personal liability	No	Typically yes	Typically yes
Loss of use / ALE	No	Typically yes	Typically yes
Number of policies	One	Two, from two carriers	One
Number of deductibles	One	Two, applied separately	One
Generally accepted by lenders alone	Often not	Usually	Yes

DIC policy terms are not standardised the way admitted homeowners forms are — “typically yes” means the coverage is normally included, not that it is guaranteed in every form. Read the policy you are offered.

The risk most people misjudge: for the typical California home, a burst pipe or a theft is far more likely than a wildfire. Skipping the DIC policy because the fire risk feels like the real threat gets the probabilities backwards — it leaves you uninsured against the losses most likely to actually happen to you.

What the FAIR Plan can and can’t add

FAIR Plan add-ons vs. a DIC policy

According to the California Department of Insurance, a FAIR Plan dwelling policy covers fire or lightning, internal explosion and smoke. Extended Coverage and Vandalism or Malicious Mischief can be added to the FAIR Plan policy for an additional premium. Theft and liability are not covered by the FAIR Plan at all — which is why CDI suggests considering a separate DIC policy to fill the gaps.

So the add-ons widen the list of named perils on the FAIR Plan policy itself, while the DIC policy supplies the coverages the FAIR Plan does not offer. What “extended coverage” means →

Cost

What a DIC policy costs

Commonly estimated at an additional 25% to 60% of the FAIR Plan premium. It is a separate policy from a separate carrier priced on its own terms, so that range is a planning figure rather than a formula — your actual number depends on the carrier, your limits, your deductible and your property.

What moves it:

Your liability limit. Often the single largest lever, and the one most worth not economising on.
Personal property limit and any scheduled items.
Loss-of-use limit and whether a time cap applies.
The deductible, which is separate from your FAIR Plan deductible.
Property characteristics — age, plumbing, prior water claims matter here more than wildfire exposure does, because this policy is not covering fire.

Budgeting properly: our FAIR Plan premium calculator adds an estimated DIC wrap on top of the FAIR Plan estimate — the piece the Plan's official calculator cannot include, because the Plan does not sell DIC. Both figures are modeled estimates for budgeting, not quotes.

The four components of the all-in FAIR Plan cost →

Buying one

Who sells DIC coverage and how to get it

The California Department of Insurance maintains a list of insurers writing DIC coverage and directs FAIR Plan policyholders to it. You place the policy through a broker, and the practical advice is simple: price it in the same conversation as the FAIR Plan application, not as a follow-up.

Two reasons that sequencing matters more than it sounds:

Not every FAIR Plan broker can place DIC coverage. If yours cannot, you need a second broker — and discovering that near your coverage end date rather than at the start is how gaps happen.
The dates have to line up. Two policies from two carriers means two effective dates and two renewal dates. Someone has to coordinate them, and that someone is your broker.

How to find and vet a broker who can place both →

Things to confirm before you bind

Is the DIC carrier admitted or non-admitted? Many DIC policies are written on a surplus-lines basis, which means no California Insurance Guarantee Association backing and non-standardised forms. Check the financial strength rating.
Do the two effective dates align — with each other, and with the end of your current coverage?
What is the liability limit, and is it enough for your situation?
Is loss of use capped by time as well as amount? After a regional wildfire, displacement is long and local rents spike.
Is personal property replacement cost or actual cash value?
Will your lender accept this specific combination? Ask the servicer, in writing, before binding.

CDI’s list

Insurers California lists as selling DIC policies

These are the insurers the state’s regulator names. The list changes, so check the current version before you call anyone.

California Automobile Insurance Company (Mercury Insurance Group)
California Capital Insurance Company
California Mutual Insurance Company
CSAA Insurance Exchange
DB Insurance Co., Ltd (U.S. Branch)
Foremost Insurance Company
Incline Casualty Company
Metromile Insurance Company
Obsidian Pacific Insurance Company
One Alliance North America Insurance Company
Pacific Specialty Insurance Company
Standard Fire Insurance Company
Sutton National Insurance Company
US Coastal Property and Casualty Insurance Company
Zurich American Insurance Company
Seaview Insurance Company (Aegis Group)
Farmers Insurance Exchange (Farmers Group)
Nationwide Mutual Insurance Company (Nationwide Group)

What this list is — and isn’t. The California Department of Insurance publishes these insurers as offering a DIC product that complements a FAIR Plan policy, so that someone who buys both has coverage similar to a standard homeowners policy. CDI says it is not a list of insurers selling DIC policies that add perils to a standard homeowners policy. Inclusion is not an endorsement by CDI or by Coverage Clock, and we have not checked each insurer’s current appetite or prices. CDI’s page lists each insurer’s phone number and website. List as published on CDI’s DIC insurer page, checked October 9, 2026.

Claims

Two policies, two claims

This is the part that catches people, and it is worth understanding before you need it rather than during.

Because the FAIR Plan policy and the DIC policy are separate contracts with separate carriers, a loss may involve two claims, two adjusters and two deductibles. Which policy responds depends on the cause of loss:

A house fire — the FAIR Plan policy responds for the structure. The DIC policy typically handles loss of use and personal property elements the FAIR Plan does not cover.
A burst pipe — the FAIR Plan policy does not respond at all. This is the DIC policy's claim.
A theft — DIC only.
A visitor injured on your property — DIC liability only.

Practical consequence: keep both declarations pages together, know which carrier to call for which kind of loss, and be aware that a single event touching both policies may mean paying both deductibles.

Do not let one lapse. Two policies with two renewal dates is two chances to accidentally lose coverage. Diarise both, and if you change one, check the other still fits around it.

Alternatives

When you might not need a DIC policy at all

The DIC policy exists to solve a problem created by being on the FAIR Plan. If you can avoid that problem, you avoid the policy.

An admitted homeowners policy. Broadest and cheapest, one policy, one deductible. Always worth re-shopping — a declination from one carrier says little about the others, and documented mitigation can change answers.
Surplus lines (E&S). Non-admitted specialty carriers write full homeowners coverage for high-risk homes. It costs more than admitted coverage but needs no DIC wrap, which makes the true comparison FAIR-Plan-plus-DIC against the surplus-lines premium — not against the FAIR Plan premium alone. People skip this market and should not.
A future comprehensive FAIR Plan policy. CDI says a comprehensive residential option — adding water damage, liability, theft and additional living expenses — is in development. As of October 2026 it is not yet available, so the DIC pairing remains necessary for now.

Working back toward the admitted market → · Comparing the options properly →

Go deeper

Related California FAIR Plan guides

Common questions

DIC insurance questions

What is DIC insurance in California?

A Difference in Conditions policy is a separate policy from a separate carrier that wraps around a fire-only policy, such as a California FAIR Plan dwelling policy, to cover what it excludes — principally water damage, theft, personal liability and loss of use. The FAIR Plan does not sell it; the California Department of Insurance maintains a list of insurers that write it.

Do I need a DIC policy with the California FAIR Plan?

Almost always. A FAIR Plan dwelling policy covers only fire, lightning, internal explosion and smoke, so without a DIC policy you have no water damage, theft, liability or loss-of-use coverage. Most mortgage lenders require coverage the FAIR Plan alone cannot provide. Roughly half of FAIR Plan policyholders do not carry one.

How much does a DIC policy cost in California?

Commonly estimated at an additional 25% to 60% of the FAIR Plan premium, though it is a separate policy priced on its own terms. Your liability limit, personal property limit, loss-of-use limit and deductible drive the number, along with property characteristics such as age and plumbing — not wildfire exposure, since this policy is not covering fire.

Who sells DIC insurance in California?

Specialty carriers, many on a surplus-lines basis. The California Department of Insurance maintains a list of insurers writing DIC coverage and directs FAIR Plan policyholders to it. You place the policy through a broker, and not every FAIR Plan broker can place DIC coverage, so ask early.

Does a DIC policy cover wildfire damage?

Generally no, and it is not meant to — fire is what the FAIR Plan policy underneath it covers. The DIC policy handles the non-fire perils the FAIR Plan excludes. In a fire loss the two usually work together, with the FAIR Plan responding for the structure and the DIC policy covering elements such as loss of use.

Will my lender accept a FAIR Plan policy with a DIC policy?

Usually, because the combination provides coverage close to what a standard homeowners policy would. Requirements vary by servicer, and Fannie Mae guidelines accept FAIR Plan and other state-plan coverage in defined circumstances. Confirm with your specific servicer in writing before binding rather than assuming.

Can I buy a DIC policy without the FAIR Plan?

A DIC policy is designed to sit on top of an underlying fire policy, so it is normally written alongside one rather than on its own. If you do not need a fire-only policy in the first place — because an admitted or surplus-lines carrier will write you full homeowners coverage — then you generally do not need a DIC policy either.

Do I pay two deductibles with FAIR Plan and DIC?

Potentially, yes. They are separate policies with separate deductibles, so a single event that triggers both may mean paying both. Which policy responds depends on the cause of loss, which is why it is worth knowing in advance which carrier to call for which kind of claim.