When it comes to insurance, most people know the common options: auto, home, renters and other related coverage types. What many people may not be as familiar with is difference in conditions coverage, or DIC. So what is difference in conditions insurance and how is it used? This unusual type of insurance can be purchased to help protect your finances from a broader range of perils compared to a standard insurance policy.

Compare rates and save on home insurance today!

Close X
Advertising Disclosure
This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions.

Compare home insurance rates

Answer a few questions to see personalized rates from top carriers.
Your information is kept secure
Caret DownCaret Up
Caret DownCaret Up
Field is required
Powered by Coverage.com (NPN: 19966249)
Insurance Disclosure

Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.

Quick Facts
average savings through Bankrate
Two Thirds
2 out of 3 homes
are underinsured
Insurance Home
1 out of every 20
insured homes makes a claim each year
Circle Check
100% of homes
need insurance before getting a mortgage
See more providers in
Choose from insurers in

Leaving so soon? Your custom quotes are just minutes away.

While the majority of homeowners don’t need and can’t qualify for difference in conditions coverage, there are some parties, like large businesses, that may find it beneficial to consider a DIC policy in order to help fill in any coverage gaps. Here’s what you need to know about this unique type of insurance.

What is difference in conditions (DIC) insurance?

A difference in conditions policy is an insurance policy that can help provide expanded coverage for your home or business if you live in a region that sees regular disasters.

The average homeowner does not likely need a DIC policy. Most homeowners are adequately covered by a standard HO-3 policy. But for business owners, especially those who own large businesses, DIC insurance can bridge the gap between what a standard business insurance policy covers and what they might face after a disaster.

Key takeaway
What is DIC insurance? Difference in conditions insurance provides expanded coverage that protects the policyholder from risks outside the scope of a typical insurance policy. DIC policies are typically reserved for large-scale business operations.

How does difference in conditions insurance work?

Standard home and business insurance policies cover you against particular insurance perils. While you can buy fairly robust policies and add endorsements for even more coverage, standard insurance doesn’t cover everything. Homeowners insurance, for example, does not typically cover your home for flooding and earthquakes.

For homeowners, flood insurance and an earthquake endorsement or policy may be enough to get the missing coverage. For larger organizations, businesses and perhaps even luxury homes, DIC coverage can be a good option to fill in the gaps left by conventional policies. To find out if you could benefit from a DIC policy, talk to your insurance agent or broker and see what they have to say about your coverage. DIC coverage is flexible, and you may be able to find a policy that is specifically formulated to your own circumstances.

DIC insurance is generally written by surplus line carriers. Surplus lines carriers are often willing to take on higher risk than standard homeowners insurance companies or business insurance companies, but the charges for this coverage may be quite high, and the deductible may be high as well. Having said that, if you live in an area where the risk of catastrophic damage is relatively high, you may want to consider this kind of coverage.

What a DIC policy covers

For business owners, who are the typical clients for DIC coverage, many natural disasters are covered by standard business insurance, including fire, windstorm and snow damage. Smaller-scale disasters, from theft to roof damage after a hail storm, are also typically covered by standard policies. Standard business insurance policies, in fact, cover you for the most common types of disasters that may strike, and they provide coverage for the majority of claims.

But there are some catastrophes that typical policies don’t cover. Flooding, for example, is a common insurance exclusion and requires you to purchase a flood policy to be protected. Earthquake insurance coverage is also not a part of regular business insurance policies. Each policy may have additional exclusions. Read your policy carefully and talk to your company to understand what coverage types you do and don’t have.

DIC insurance covers disasters beyond the named perils that are common in most business policies. Just like your home or business insurance, DIC insurance will have a deductible. Unlike the deductible on standard policies, a DIC deductible is likely to be relatively high.

Who needs difference in conditions insurance?

Most homeowners do not need difference in conditions insurance. An HO-3 or HO-5 homeowners policy will protect the majority of homeowners from the most likely perils they will face. However, if you live in an area that is at high risk of natural disasters or rare, catastrophic damage, your insurance agent may suggest that you consider DIC insurance.

DIC insurance is designed for business owners, especially large-scale business owners, who benefit from the increased coverage options of commercial property policies. In fact, DIC policies are most commonly seen with business properties, as they augment the coverage from a simple commercial policy. Construction companies, for example, often rely on DIC policies to ensure that they are covered while working on a project.

Frequently asked questions

    • Whether or not you need landslide coverage typically depends on your risk level. Landslides are not covered by basic homeowners insurance, so if your home is located on a slope or if your home is in an area that is known for earth movements, it may benefit you to consider DIC coverage. If you’re interested in this type of policy, you may want to ask your insurance agent if they offer an endorsement, or add-on, that will cover both your home and the contents in case of an earthquake, mudflow or landslide. Remember, though, that mudslides, which are a mix of earth and rock with little to no liquid, are not typically covered by any type of insurance policy.
    • No, all insurers do not offer difference in conditions insurance policies. DIC policies are usually offered by surplus lines carriers, which are companies willing to take on higher risk policies. This includes policies that are higher risk than the average homeowners or business insurance policies. The National Flood Insurance Program (NFIP), for example, is one primary supplier of surplus lines policies, and it underwrites flood policies for homes across the country. NFIP insurance might be available through a local carrier and would help cover flooding and related mudflow issues. DIC policies, on the other hand, may cover landslides and earthquakes, and are purchased separately from your regular business insurance.