Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Commercial LinesEasy
A Florida-based manufacturing plant has a standard Commercial Property policy covering its building and contents. They are concerned about potential damage from perils like flood and earthquake, which are typically excluded from their current policy. Which specialized policy would fill these coverage gaps?
- AInland Marine Policy
- BBusinessowners Policy (BOP)
- CDifference in Conditions (DIC) Policy
- DCommercial Package Policy (CPP)
Show answer & explanationAnswer & explanation
Correct answer: C. Difference in Conditions (DIC) Policy
A Difference in Conditions (DIC) policy is a specialized property insurance policy designed to fill gaps in coverage provided by standard property policies, most commonly covering perils like flood and earthquake that are typically excluded.
Why the other options are wrong
- A. An Inland Marine policy covers movable property or instrumentalities of transportation/communication, not fixed property for perils like flood or earthquake.
- B. A BOP is a package policy for small businesses and also excludes perils like flood and earthquake.
- D. A CPP combines various standard coverages into one policy but doesn't inherently add coverage for excluded perils like flood or earthquake.
Difference in Conditions (DIC) Policy
A Difference in Conditions (DIC) policy is a specialized property insurance policy that provides 'all-risk' coverage for perils typically excluded from standard property policies, such as flood, earthquake, and sometimes mysterious disappearance.
- Fills gaps in standard property insurance.
- Commonly covers flood and earthquake.
- Often written on an 'all-risk' basis.
Memory trick: When your standard policy has a 'Difference' in what it 'Conditions' cover, a 'DIC' bridges that gap for floods and quakes!