What Homeowners in Orange County Need to Know
In many parts of California, especially areas affected by wildfire risk, it has become increasingly difficult for homeowners to obtain traditional homeowners insurance. As a result, many property owners in Westminster, Irvine, Huntington Beach, and throughout Orange County are turning to the California FAIR Plan combined with a Difference in Conditions (DIC) policy.
This combination can provide protection similar to a standard homeowners policy when traditional coverage is not available.
What Is the California FAIR Plan?
The California FAIR Plan is a state-mandated insurance program designed to provide basic fire insurance coverage for homeowners who cannot obtain insurance through the traditional market.
The FAIR Plan typically covers only limited risks, such as:
Fire
Lightning
Internal explosion
Smoke damage
Additional coverage options may be available for risks like windstorm, vandalism, vehicles, or volcanic eruption for an added premium.
However, the FAIR Plan does not provide full homeowners coverage.
Important protections that are usually not included in the FAIR Plan include:
Personal liability protection
Theft coverage
Water damage from sudden leaks
Many other common homeowners risks
Because of these gaps, most homeowners also need a Difference in Conditions (DIC) policy.
What Is a Difference in Conditions (DIC) Policy?
A Difference in Conditions policy works alongside the FAIR Plan to fill in the coverage gaps.
When combined, the FAIR Plan + DIC policy together function similarly to a standard homeowners insurance policy.
The DIC policy typically provides coverage for:
Personal liability
Water damage from plumbing leaks
Theft
Broader property protection
Additional living expenses
Personal property coverage
This means the FAIR Plan covers fire-related risks, while the DIC policy covers many of the other perils homeowners normally expect in a homeowners policy.
Mercury’s Difference in Conditions Endorsement
Insurance companies like Mercury Insurance offer Difference in Conditions endorsements designed to complement the FAIR Plan.
Mercury provides two main DIC options:
H0901CA Endorsement
Excludes coverage for risks already covered under the FAIR Plan and any extended coverage options.
H0902CA Endorsement
Excludes only the basic FAIR Plan perils (fire, lightning, internal explosion, and smoke).
In some cases, the H0902CA option may allow homeowners to reduce the coverage purchased through the FAIR Plan, which can help lower the overall cost of both policies combined.
Who Needs a FAIR Plan + DIC Policy?
This type of coverage is becoming more common for homeowners in California who:
Live in wildfire-prone areas
Have older homes insurers will not cover
Have prior insurance claims
Were non-renewed by traditional insurance companies
Many homeowners in Orange County, Riverside County, and parts of Los Angeles County are now using this solution.
Important Requirements for DIC Policies
When purchasing a Difference in Conditions policy, insurers usually require:
A copy of the FAIR Plan declarations page
The home to be insured to 100% of replacement cost
The policyholder to sign the DIC endorsement form at purchase
These requirements help ensure the property is properly insured between both policies.
Why Many California Homeowners Are Using This Option
Due to the ongoing insurance crisis in California, the FAIR Plan + DIC strategy has become one of the most common solutions for homeowners who cannot obtain standard coverage.
This combination allows homeowners to:
Maintain mortgage compliance
Protect their property from major losses
Add liability protection and additional coverages
Customize protection based on their needs
Get Help With FAIR Plan and DIC Insurance in Orange County
If you are having difficulty finding homeowners insurance in Westminster, Irvine, Huntington Beach, or anywhere in Orange County, a FAIR Plan combined with a Difference in Conditions policy may be the right solution.
At Starwest Insurance Services, we help homeowners:
Obtain California FAIR Plan coverage
Add Difference in Conditions (DIC) policies
Compare insurance options from multiple carriers
Ensure their home is properly protected
If you would like help exploring your options, contact Starwest Insurance Services for a personalized homeowners insurance quote.