# Understanding Wrap-Around Difference in Condition (DIC) Policies & the FAIR Plan > Source: https://www.coveragecat.com/insurance-types/home/wraparound-difference-in-conditions-policy > Description: A FAIR Plan only covers fire and smoke (named perils), and policyholder need to buy a separate Difference in Conditions policy that covers theft, liability and more to have complete homeowners coverage. > Updated: 2026-08-13 ## Why a FAIR Plan Alone Isn't Enough—and How a DIC "Wrap-Around" Fills the Gap If you're forced into California's FAIR Plan after a [wildfire non-renewal from major carriers](https://www.coveragecat.com/blog/did-state-farm-drop-california-homeowners-before-wildfires), congratulations—you have fire coverage at last. But as Redditors often warn, the FAIR Plan covers only fire, lightning, smoke, and internal explosions, and policyholders who need water damage, liability, theft, or additional living expenses coverage must buy a separate Difference in Conditions policy [(CDI, "California FAIR Plan", 2025)](https://www.insurance.ca.gov/01-consumers/200-wrr/California-FAIR-Plan.cfm). Here's why pairing it with a Difference-in-Conditions (DIC) "wrap-around" policy isn't just smart—it's essential. ## **What is the California FAIR Plan?** The California FAIR Plan is a last-resort insurance option for California homeowners who can't obtain coverage through traditional insurance companies. It was established in 1968 to provide basic property insurance coverage to homeowners in high-risk areas, particularly those vulnerable to wildfires. Despite common misconceptions, the FAIR Plan is not a government-backed program but is financially supported by California's private home insurance companies. As of early 2026, the FAIR Plan held roughly 668,000 active policies, up from approximately 154,000 in 2019—more than a four-fold increase in just six years, reflecting the broader [California home insurance crisis](https://www.coveragecat.com/blog/between-the-fault-and-the-flames-californias-home-insurance-market). The FAIR Plan provides only basic fire insurance coverage, protecting against losses from fire, smoke, lightning, and internal explosion. While this satisfies mortgage lenders' minimum requirements, it leaves gaps in coverage compared to a standard homeowners policy. * **Included in every FAIR Policy:** Fire, smoke, lightning, internal explosion * **Available as optional "additional coverage":** Vandalism & malicious mischief, windstorms and hail, riots, aircraft or vehicle damage, explosions. * **Excluded:** Water damage, theft, liability, medical payments, additional living expenses, vandalism, and more The California FAIR Plan has officially requested an average rate increase of 35.8%, a major jump driven by the state's new approval to use wildfire catastrophe models in pricing. California Department of Insurance data show that **for every two FAIR Plan policies**, only **one** DIC policy is purchased ([(California Department of Insurance, "XL Catlin and Bamboo Insurance Enter Underwriting Agreement")](https://axaxl.com/press-releases/xl-catlin-and-bamboo-insurance-enter-underwriting-agreement)). In other words, roughly **50% of FAIR Plan policyholders** remain exposed to non-fire perils because they haven't added DIC coverage. ### The Coverage Gap: What You're Missing Relying solely on the FAIR Plan leaves you vulnerable to many non-fire losses. Burst pipes, or third-party lawsuit could cost thousands out of pocket. ### Enter the DIC Policy: Your Wrap-Around Solution **Difference-in-Conditions (DIC)** policies are designed to "wraparound" the FAIR Plan, covering the perils it excludes([(California Department of Insurance, "Get a Quote - Bamboo Insurance")](https://bambooinsurance.com/get-a-quote/)). **How It Works:** * **The California FAIR Plan** handles claims for fire, lightning, and internal explosion - as well as any additional coverages added to your policy. * **Your DIC Policy**, which excludes fire, lightning, and internal explosion, covers a host of additional risks, which may include water damage, theft, liability, medical payments, additional living expenses, and more. Together, these two policies make up approximately the same coverages as a standard HO-3 (homeowners), HO-6 (condo owners), or DP-3 (landlord) policy. ### Who Sells DIC Policies? You can't buy DIC from the FAIR Plan itself. Independent agents and surplus-lines carriers offer wrap-around policies . According to the CDI, these insurers include (but aren't limited to): | Insurer & Market | Online Purchase Available? | Market Type | Key Differentiators | | --------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | **ACE Property & Casualty**
(now part of Chubb) | No – quote via independent agent only | Admitted | Broad admitted-market DIC coverage; backed by A++ AM Best financials; wide agent network. | | **Chubb** | No – must contact an agent or broker via "Get a Quote" [(Chubb, "Homeowners Insurance: Get a Free Quote", 2025)](https://www.chubb.com/us-en/individuals-families/products/home/homeowners-insurance.html) | Admitted | High-limit "Masterpiece" form; complimentary risk consulting; extensive loss-preventive services. | | **Lloyd's of London** | No – placed only through surplus-lines brokers | Surplus Lines | Global specialty market; bespoke wording; deep capacity for large or unusual risks. | | **Tokio Marine HCC** | No – underwritten via broker portals (e.g., ArtisanEdge) | Surplus Lines | Specialty DIC forms; strong global reinsurer backing; tailored property and liability wrap packages. | | **Aspen Specialty** | No – sold through surplus-lines MGAs (e.g., Aspen MGA) | Surplus Lines | Niche focus on high-value and hard-to-place homeowners; flexible terms and endorsements in select states. | | **Bamboo Insurance** | Yes – request an online quote via [Coverage Cat](https://www.coveragecat.com/)) | Admitted | Digital-first platform; streamlined online quoting and policy management; writes in select wildfire zones. Now offers E&S Signature product through partnership with Accredited [(beinsure, "Bamboo Insurance with Accredited to launch E&S homeowners cover in California", 2026)](https://beinsure.com/news/bamboo-launches-homeowners-cover-in-california/) | **Notes on Purchase & Placement** * **Admitted vs. Surplus Lines:** Admitted carriers (ACE/Chubb/Bamboo) are regulated by CDI and backed by the California guaranty fund; surplus-lines markets (Lloyd's, Tokio Marine HCC, Aspen) require a surplus-lines broker and lack state guaranty-fund protections. * **Online Portals:** Only Bamboo offers direct online quote initiation; all others require agent or broker engagement. * **Timing:** Surplus-market capacity can fluctuate—start shopping **90 days before** your FAIR Plan renewal to secure best terms. ### Cost & Considerations * **Premiums:** A FAIR Plan + DIC combo often costs **20–40% more** than a fire-only plan * **Limits & Deductibles:** DIC policies typically mirror FAIR Plan limits but add separate deductibles (often $500–$2,500). The maximum dwelling coverage limit for residential policies is currently $3 million, raised from the previous $1.5 million cap. * **Annual Shopping:** As your FAIR Plan premium rises, shop DIC policies annually to compare competitive offers. > "I had FAIR Plan fire coverage, then got nailed for $7K in water damage—my DIC saved me." > > "Don't skip the wrap-around. It's not optional if you value your belongings and liability protection." ([(CFP Net, "Bamboo Insurance")](https://bambooinsurance.com/)) For seamless multi-carrier comparison—including admitted, surplus, and wrap-around options—reach out to **Coverage Cat**, our recommended independent broker with deep expertise in [expert solutions for California homeowners](https://www.coveragecat.com/blog/expert-solutions-for-california-homeowners-facing-the-insurance-crisis) navigating high-risk markets.