Digging Deeper: What Is Difference in Conditions (DIC) And What You Need To Know About This Policy

Many businesses obtain Difference in Conditions (DIC) insurance to address potential coverage gaps. This coverage insight discusses DIC insurance, including what it is and what types of businesses can benefit from it. Floods, earthquakes, and other natural disasters are common threats to a business’s property. According to the Insurance Information Institute, natural disasters cause billions of dollars in property losses in the United States annually. While commercial property insurance is essential to a company’s risk management strategy, it may exclude coverage for floods and earthquakes.
As a business owner, you know what’s best for your business. So you must ask yourself, do I need DIC coverage? Is there another way of protecting my business without spending much of my money? What would be the right coverage for my business?

What Is Difference in Conditions Insurance?

DIC insurance supplements a business’s property policy by protecting against perils not typically covered by standard coverage. They commonly use it to broaden coverage by providing additional coverage limits for specific risks, such as insuring the difference between covered causes of loss under a commercial property policy and covered causes of loss under a DIC policy.

Most DIC policies include coverage for income loss and other expenses incurred from physical damage to the insured’s property. Notably, DIC insurance can pay out losses based on the actual cash value or the replacement cost of the damaged property.

Depending on the policy language, the specific perils covered by DIC insurance will vary. Many insureds, however, use DIC coverage to protect their businesses from major natural disasters such as floods, mudslides, and earthquakes.

How Does Difference in Conditions Coverage Work?

DIC policies are typically offered separately and are highly customizable. As a result, DIC policies will differ depending on the needs of an organization and the insurance carrier writing the policy. DIC policies, however, have similar features that businesses should be aware of before purchasing coverage.

Who Needs DIC Insurance?

Because standard commercial property insurance frequently excludes natural disasters, DIC coverage is critical for businesses in flood- or earthquake-prone areas. DIC coverage may be a good fit for businesses in particular if:
  • The commercial property insurer is unable or unwilling to provide insurance for specific perils to the business.
  • The company’s commercial property insurance provides insurance for specific perils, but the premium is too high.
  • The company has natural disaster insurance, but it requires higher limits.

Contact Homeowners Insurance California To Get Your Difference in Conditions Policy

There are some ways for home or unit owners to save from their insurance costs. If DIC comes to your mind as a business owner, that’s a great way of thinking. We are always thinking about the possibilities and unwanted situations that may come around when running our business. Small things turn into disastrous events, and that’s what we are avoiding. That’s why DIC and other helpful insurance policies provide us with protection against these unwanted events that keep on happening.
Protect your business from unexpected events that can happen at any time. To learn whether DIC insurance is a good fit for your organization, contact Homeowners Insurance California today. One of our experienced agents can assist you with all your questions. We are always here for you for your insurance needs.