House on a hill caught in a wildfire

What Is A Difference In Conditions Policy?

A difference in conditions insurance policy is designed to cover losses that aren’t covered under a homeowner’s standard insurance policy.

California homeowners, especially those who live in more rural areas, know that a wildfire can happen at any moment and other perils can strike their homes. While a homeowner’s insurance policy covers essential parts of protecting property and belongings, potential gaps in coverage, especially in rural areas where different types of insurance only protect against natural disasters, can occur. For example, homeowners who purchase a California FAIR Plan insurance may have gaps in their protection from rain, theft, water and liability damages. That’s where a difference in conditions endorsement can help homeowners.

“Policyholders living in areas prone to the elements will need added protection beyond one that covers damages caused only by fires,” said Mercury Insurance Product Manager for Homeowners Adam Bakonis. “Mercury’s difference in conditions endorsement to a California FAIR Plan policy can help these homeowners with coverage for more common claims, such as a broken water pipe, if anything else happens.”

By providing coverage that wraps around specific policies, Mercury policyholders with a difference in conditions endorsement will be protected from damages caused by more common occurrences such as broken pipes, theft, or liability. Policyholders will also have the option for Mercury to cover damages from other hazards including windstorms, hail, riot or civil commotion, aircraft, vehicles and vandalism or malicious mischief.

“Mercury’s difference-in-conditions endorsements provide greater protection for many California homeowners,” said Bakonis. “Most property claims filed don’t come from a large event, but rather common occurrences.”

Some of the most common property claims include:

  • Interior pipe leaks: The top cause of property claims, water leaks from pressurized or drain pipes in the wall, attic, or foundation can cost an average of $27,000 in damages.
  • Appliance-related water leaks: Leaks from hot water heaters, refrigerator icemaker lines, washing machines and washing machine hoses can cost homeowners $21,000 in damages.
  • Theft: Theft from a vehicle, home, or another location away from the home can cost homeowners close to $5,000 on average.
  • Plumbing overflows: Overflows from toilets, sinks, and tubs can cost homeowners an average of $24,000.
  • Service line claims:  This involves losses related to the failure of underground utility lines such as tree roots impacting the sewer line, a sewer line collapse, or a main water supply line bursts that the homeowner is responsible for between the house and the street. Mercury offers an optional limited coverage for service lines and the average claim can come close to $5,000 as there is often a significant cost to dig up the property to get to the line for repair or replacement.

Liability claims are less common but their exposure can still be significant. One claim from a dog bite on a homeowner’s property cost $90,000, luckily the homeowner had purchased a difference in conditions endorsement from Mercury Insurance.

Another homeowner with a difference in conditions endorsement filed a claim due to the weight of snow in some trees that resulted in the trees falling and damaging the home, a shed, and fences causing over $270,000 in damages.

From trees falling to interior and water damage, there are risks involved from both weather and non-weather related events that property owners should be aware of and protected against. The difference in conditions endorsement is designed to protect homeowners by filling in the gaps left by a California FAIR Plan insurance policy. Purchasing a difference in conditions policy could provide the added protection a homeowner needs.

Review your situation and contact your insurance agent to see if a difference in conditions policy is right for you.