What is DIC including EQ?
DIC (Difference in Conditions) insurance is a policy designed to fill gaps between property coverage forms. When paired with an earthquake (EQ) endorsement or a stand‑alone quake policy, it provides protection for damage from seismic events that standard property insurance may exclude or limit. This hybrid approach is commonly used to extend property coverage and address perils such as earthquake damage, landslide, and related ground movement.
Who needs it
Owners and operators of commercial property, retailers, manufacturers, contractors, and event organizers often consider DIC with earthquake coverage when their primary property policy excludes earthquake or caps recovery. Associations, clubs, and other organizations with buildings, equipment, or inventory in seismic zones also use DIC to reduce recovery gaps. For information on other products that organizations sometimes bundle with property solutions, see CompleteMarkets — Long Term Care Insurance storefront unavailable.
What it typically covers
DIC with EQ typically complements a primary policy by covering perils excluded from the insured’s first policy. Common coverages include:
- Property coverage for buildings and contents damaged by earthquake shaking or secondary perils
- Equipment coverage for machinery and production lines affected by seismic events
- Temporary relocation and business interruption losses tied directly to earthquake damage
- Debris removal and demolition costs connected to seismic collapse
Example risk scenario: a retail facility suffers structural damage in a quake and needs both property repairs and short‑term business interruption coverage to stay afloat.
Common exclusions or limitations
Typical exclusions include wear and tear, faulty workmanship, flood (unless specifically endorsed), and some types of landslide not linked to seismic activity. Policies may also limit coverage by sublimits, waiting periods for business interruption, or endorsements that narrow scope. Underwriting factors and specific endorsements will determine exact limitations.
Factors that influence cost
Premiums for DIC with earthquake exposure depend on several underwriting factors: geographic seismic risk, construction type and materials, age of the structure, occupancy and use (e.g., manufacturing versus office), value of equipment and inventory, risk management measures (retrofits, seismic bracing), and desired limits or deductibles. Transportation risks or exposures for goods in transit can raise the premium if the coverage is extended to shipped property.
Proof of insurance & compliance
Many landlords, lenders, and contracting partners require proof of adequate property and earthquake insurance. Certificates of insurance will identify DIC endorsements, limits, and any additional insureds. Insureds should confirm that the policy language meets contractual requirements and shows the correct limits and endorsements.
How to get a quote
To obtain a quote, gather basic property information (location, construction, year built, occupancy, values of building and contents, and recent loss history). Brokers and carriers will evaluate underwriting factors and suggest deductibles or engineering retrofits that can lower premium. If you’re unsure which limits or endorsements you need, talk to your agent for guidance and a tailored quote.
Frequently Asked Questions
Do standard property policies cover earthquake damage?
Many standard property policies exclude earthquake or impose very limited coverage. DIC with EQ fills gaps by providing supplemental protection for seismic events.
Can DIC policies cover business interruption after an earthquake?
Yes. DIC endorsements often include business interruption or contingent business interruption coverage, subject to policy terms, waiting periods, and limits.
How do deductibles work for earthquake coverage?
Earthquake deductibles are commonly higher than for other perils and may be expressed as a percentage of property value. Exact deductible terms vary by policy and insurer.
Still have questions? Talk to a local insurance expert.