FAIR Plan vs DIC Insurance
A FAIR Plan covers fire and basic perils when no insurer will. DIC adds back theft, water damage, and liability.
Free to compare
What the FAIR Plan Covers
The FAIR Plan only insures fire, lightning, and a short list of named perils. It leaves out theft, liability, water damage, and often wind. If your house has a bare FAIR Plan policy, those gaps exist until something else fills them.
Why You Need DIC
DIC stands for difference in conditions. It's a second policy sold alongside the FAIR Plan to cover what the FAIR Plan leaves out, mainly theft, liability, and water damage. Most lenders expect this combination to count as full coverage, not the FAIR Plan alone.
What Your Lender Requires
A FAIR Plan policy by itself usually doesn't satisfy a mortgage lender, since it lacks liability coverage and leaves gaps lenders don't accept. Check your loan documents or ask your lender directly whether a DIC policy is required alongside it.
Shopping Both Policies
The FAIR Plan has one set of rates set by the state plan, so there's little to compare there. The DIC policy is sold by private insurers, so its price and what it covers can vary. That's the piece worth comparing before you commit to one.
The DIC Policy Is the Part Worth Comparing
The FAIR Plan's price is fixed. The DIC policy isn't. Insurers differ on what they charge and what they'll cover alongside your FAIR Plan, so checking a few before you commit is where the savings and the gaps both show up.
How Long Does This Setup Last
A FAIR Plan policy is meant to be temporary, but temporary can stretch longer than people expect. Most FAIR Plans are written for one year at a time, same as a standard policy, and renew automatically if nothing changes. Some homeowners stay on one for years because the underlying problem, a wildfire-prone area, an aging roof, a insurer pulling out of the region, never resolves. Others move off within a year once the roof gets replaced or enough time passes since the claims that caused the drop.
Getting back to a standard policy usually means fixing whatever triggered the non-renewal in the first place. If it was the roof, a new one often reopens the door. If it was claims history, insurers typically look back three to five years, so time alone can clear it. If the problem is where the house sits, a wildfire zone or a coastal flood area, that one doesn't go away, and the FAIR Plan plus DIC combination may be the long-term answer rather than a stopgap.
Dropping the DIC policy at any point isn't something to do without checking first. It's the piece covering liability and theft, and letting it lapse brings back the exact gaps it was bought to close. If the FAIR Plan policy itself lapses, most mortgage agreements let the lender buy force-placed coverage on the homeowner's behalf, usually at a higher cost and with less coverage than either the FAIR Plan or a standard policy. That's worth avoiding even during a short gap.
Each year on the FAIR Plan is a good point to check whether standard coverage has become available again. Insurers change what they'll write in an area over time, sometimes opening back up after a few years of pulling back. Asking doesn't cost anything, and an agent or a quote comparison will show whether a standard policy is priced close enough to make switching worth it, or whether the FAIR Plan and DIC combination is still the better fit for the house.
Can You Ever Get Off the FAIR Plan
A FAIR Plan policy is meant to be temporary, but temporary can stretch longer than people expect. Most FAIR Plans are written for one year at a time, same as a standard policy, and renew automatically if nothing changes. Some homeowners stay on one for years because the underlying problem, a wildfire-prone area, an aging roof, an insurer pulling out of the region, never resolves. Others move off within a year once the roof gets replaced or enough time passes since the claims that caused the drop.
Getting back to a standard policy usually means fixing whatever triggered the non-renewal in the first place. If it was the roof, a new one often reopens the door. If it was claims history, insurers typically look back three to five years, so time alone can clear it. If the problem is where the house sits, a wildfire zone or a coastal flood area, that one doesn't go away, and the FAIR Plan plus DIC combination may be the long-term answer rather than a stopgap.
Dropping the DIC policy at any point isn't something to do without checking first. It's the piece covering liability and theft, and letting it lapse brings back the exact gaps it was bought to close. If the FAIR Plan policy itself lapses, most mortgage agreements let the lender buy force-placed coverage on the homeowner's behalf, usually at a higher cost and with less coverage than either the FAIR Plan or a standard policy. That's worth avoiding even during a short gap.
Each year on the FAIR Plan is a good point to check whether standard coverage has become available again. Insurers change what they'll write in an area over time, sometimes opening back up after a few years of pulling back. Asking doesn't cost anything, and an agent or a quote comparison will show whether a standard policy is priced close enough to make switching worth it, or whether the FAIR Plan and DIC combination is still the better fit for the house.
Before you sign on
Check your loan documents for what your lender requires, then compare a few DIC policies against each other. The FAIR Plan price won't change, but the DIC side will, and that's where the gaps and the cost both get decided.
