California Court of Appeal, California Fair Plan Association v. Lara, as Insurance Commissioner, Docket No. B336043

Insurance Law

 

DIC Policies

 

California Law

 

 

 

DIC policies are a type of “wrap around” insurance. These policies are designed to offer current CFPA policyholders the additional liability, medical payment, and worker’s compensation coverage that the Commissioner seeks to add to CFPA’s offerings with Order No. 2021-2. The record shows DIC policies are readily available to customers everywhere in the state because the carriers offering this coverage “do not consider the location of the property in determining whether to issue a DIC policy from an underwriting standpoint.” Our Legislature has expressly endorsed the use of DIC policies as a means to fill the gaps in CFPA’s current basic property insurance policy. Under section 678, subdivision (e), every notice of nonrenewal for a residential property insurance policy expiring on or after July 1, 2021 must include the following explanation: “To supplement a FAIR Plan policy, a Difference in Conditions (DIC) policy should be considered. A DIC policy is sold by some private insurers, and provides coverage for things not covered by the basic property insurance policy provided by the FAIR Plan. A consumer who wants broader coverage than that provided by the FAIR Plan policy should contact an agent, broker, or insurance company that offers a DIC policy to obtain this additional coverage.” In connection with arguments regarding the current state of the FAIR Plan, amicus curiae Pacific Association of Domestic Insurance Companies requests that we take judicial notice of a July 2024 press release issued by the Commissioner regarding his purported concerns about the plan’s growth. We deny the request. (See Unlimited Adjusting Group, Inc. v. Wells Fargo Bank, N.A. (2009) 174 Cal.App.4th 883, 888, fn. 4 [declining to take judicial notice of Department of Corporations’ press release that had no relevance to issues on appeal].)

 

 

 

 

(California Court of Appeal, Dec. 5, 2025, California Fair Plan Association v. Lara, as Insurance Commissioner, Docket No. B336043, Certified for Publication)