What is DIC?
Difference in Conditions (DIC) insurance is a supplemental property policy that fills gaps left by standard commercial property or flood policies. It typically steps in to cover perils, like earthquake or flooding in certain forms, that primary policies exclude. For a general introduction and underwriting details, see Difference in Conditions (DIC) Insurance.
Who needs it
DIC is commonly purchased by property owners, associations, clubs, event organizers, and businesses with high-value buildings or unique exposures not fully protected by standard commercial policies. Operators with specialty equipment, retailers with inventory exposure, and contractors who store material at job sites often consider DIC when they face earthquake, flood, or other excluded perils. For region-specific underwriting information, review West Coast Commercial DIC (Earthquake) Underwriting.
What it typically covers
A DIC policy generally covers the difference between what a primary policy pays and what the insured needs for a named peril that the primary excludes. Typical coverages can include:
- Physical damage to buildings and contents from excluded perils such as earthquake or certain flood scenarios
- Temporary relocation or business interruption when excluded perils force a shutdown
- Equipment coverage for specialized machinery not fully covered under a general policy
As an example risk scenario: a small venue damaged by an earthquake might use DIC to cover repair costs and lost income not covered by its standard property policy. For combined earthquake and flood options, see DIC (Difference in Conditions) — Earthquake and Flood.
Common exclusions or limitations
DIC policies commonly exclude gradual wear and tear, war, nuclear incidents, and losses caused by faulty workmanship. They may also limit coverage for certain types of business interruption or impose sublimits for valuable items. Exclusions and waiting periods vary by insurer and endorsement.
Factors that influence cost
Underwriting factors that influence a DIC premium include location and seismic or flood zone, building construction and age, occupancy type, loss history, limits requested, and the presence of mitigation measures such as seismic retrofits or floodproofing. Higher deductible options and narrower perils can lower premiums, while broad coverage and low deductibles raise cost.
Proof of insurance & compliance
Many landlords, lenders, and municipalities require proof of adequate coverage before occupancy or loan closing. Certificates of insurance can show DIC limits and named perils, and endorsements will specify coverage triggers. Keep policy declarations and endorsements accessible and review them with your insurance representative to confirm compliance with contract or permit requirements.
How to get a quote
To obtain a DIC quote, gather basic property details (address, construction type, year built), occupancy, replacement cost estimates, loss history, and any mitigation upgrades. Brokers will evaluate primary policy gaps and present difference-in-conditions options. If you're unsure whether DIC fits your operation, talk to your agent about your exposures and coverage needs.
Frequently Asked Questions
Do I need DIC if I already have commercial property insurance?
Not always. DIC is useful when your primary policy excludes certain perils (like earthquake or flood) or has limits insufficient for your exposure. Compare exclusions and limits before deciding.
Will DIC cover business interruption?
Some DIC policies include business interruption for excluded perils, but limits and waiting periods can differ from standard policies. Confirm specific coverages and sublimits with your carrier.
How do insurers determine earthquake or flood exposure?
Insurers use location, seismic and flood zone maps, construction details, and loss history. Mitigation measures such as retrofits or elevation can affect eligibility and pricing.
Still have questions? Talk to a local insurance expert.