The gap policy: Difference in Conditions (DIC) insurance, explained
A FAIR Plan policy covers fire and little else. The DIC policy is the second half of your insurance — here's what it does, what it costs, and the exact words to say to a broker.
By the TMRW Team · Published September 2, 2026
The short answer
- A Difference in Conditions (DIC) policy is a second policy that wraps around a FAIR Plan policy and adds back what it leaves out — water damage, theft, coverage if someone is hurt on your property, and a place to live while you rebuild.
- Brokers put the combined FAIR Plan + DIC cost at roughly 20–40% more than the fire-only premium.
- DIC policies are not standardized — coverage and price vary widely by company — so the one thing you must do is read (or have a broker read) what yours actually includes.
Why this policy exists
A FAIR Plan policy covers fire, lightning, smoke, and explosions inside the home — full stop. Everything else a normal home policy handles is missing. Insurance companies that won't take your fire risk are often perfectly happy to cover everything *except* fire — so the market built a product that does exactly that: the Difference in Conditions policy, sold by a different company alongside your FAIR Plan policy.
"Difference in conditions" is just the industry's phrase for "the difference between what you have and what you used to have." Ask a broker for "a DIC policy to wrap my FAIR Plan" — those exact words — and they'll know precisely what you mean.
What a typical DIC adds back
| Coverage | FAIR Plan alone | FAIR Plan + DIC |
|---|---|---|
| Fire, lightning, smoke | Covered | Covered |
| Water damage (burst pipe, leaks) | Not covered | Usually covered |
| Theft & vandalism | Not covered | Usually covered |
| Someone hurt on your property (liability) | Not covered | Usually covered |
| A place to live while you rebuild | Not covered | Usually covered |
| Falling trees and objects | Not covered | Usually covered |
"Usually" is doing real work: DIC policies aren't standardized in California, so confirm each line on the actual policy [1][2].
What it costs
Brokers who sell the combination say a FAIR Plan + DIC package typically runs 20–40% more than the fire-only premium, and DIC policies usually carry their own deductibles (commonly $500–$2,500). On a $6,000 FAIR Plan premium, budget roughly $1,200–$2,400 more for the wrap. The cost page shows the combined math by risk level, and the calculator estimates both numbers for your home.
It's worth every dollar relative to going without: the gaps it fills — a burst pipe, a lawsuit, two years of rent during a rebuild — are the losses that actually bankrupt people, because they're the ones nobody budgets for.
Common questions
TMRW is an independent wildfire-mitigation company. We are not affiliated with, endorsed by, or connected to the California FAIR Plan Association or any state FAIR Plan, wind pool, or insurance program.
This page is educational. TMRW is not an insurance agent, broker, or producer, and nothing here is insurance advice, a coverage recommendation, or an offer of insurance. Talk to a licensed agent or broker about your coverage.
Sources
- Wraparound DIC policies: coverage, the 20–40% combined-cost band, deductibles — Coverage Cat, accessed 2026-09-02
- FAIR Plan + DIC: what the wrap restores; non-standardized terms — Old Harbor Insurance Services, accessed 2026-09-02
Keep reading
What the California FAIR Plan covers — and the long list it doesn't
The California FAIR Plan covers fire, lightning, smoke, and explosions inside the home — and almost nothing else. The full gap list, the second policy that fills it, and the payout risk nobody mentions.
What the California FAIR Plan really costs
What the California FAIR Plan actually costs in 2026 — by risk level, with the 29.1% October increase, and the second policy that turns a $5,000 premium into an $8,000 bill.
The California FAIR Plan, explained
What the California FAIR Plan is, what it really costs with the second policy you'll need, what happens if it runs out of money — and how homeowners get back to real insurance.