3.4 The DICE Policy Structure and Standard Policy Conditions
Key Takeaways
- The standard policy architecture follows the DICE framework: declarations, insuring agreement, conditions and exclusions, supported by definitions and endorsements.
- The declarations page is the who, what, where, when and how much of the contract, and it controls when it conflicts with printed form language.
- Duties after loss is a condition precedent: prompt notice, protection of property, an inventory, cooperation, submission to examination under oath and a sworn proof of loss on request.
- The other insurance condition allocates a loss among policies on a pro rata, excess or primary basis, and the subrogation condition transfers the insured’s recovery rights to the insurer after payment.
- A standard mortgage clause creates a separate contract with the mortgagee whose right to be paid survives acts of the named insured, while a loss payable clause gives the payee no greater rights than the insured has.
1. The DICE Policy Structure Framework
Standard property and casualty insurance forms are constructed using the standardized DICE framework, complemented by Definitions and Endorsements:
D — Declarations ("Dec Page")
I — Insuring Agreement
C — Conditions
E — Exclusions
Declarations ("Dec Page")
The Declarations page is the personalized first section of the policy, providing a tailored snapshot of the specific risk underwritten. It includes:
- Named Insured(s) and legal mailing address
- Policy Period: The exact inception and expiration dates and times (standardly 12:01 AM at the location of the property)
- Covered Property Description: Physical address, construction type, and occupancy
- Coverage Limits: The maximum dollar amount the insurer will pay for each coverage (e.g., Coverage A Dwelling: $450,000; Coverage C Personal Property: $225,000)
- Deductibles: The standard all-peril deductible (e.g., $1,000) and any mandatory separate Florida hurricane deductible (e.g., 2% or 5%)
- Premium Amounts: Itemized cost for each coverage line
- Mortgagee / Loss Payee: Financial institutions holding a legal secured interest
- Schedule of Attached Forms and Endorsements
Insuring Agreement
The Insuring Agreement represents the core operational promise of the contract. It outlines the broad scope of coverage provided in exchange for the insured's premium payment.
- Defines whether the policy is a Named Peril form (covering only explicitly listed perils) or an Open Peril / Special form (covering all direct accidental physical losses except those specifically excluded).
- Expresses the insurer's obligation to indemnify for property damage, loss of use, or bodily injury liability, as well as the insurer's duty to defend the insured against liability lawsuits.
Conditions
The Conditions section sets forth the administrative ground rules, procedural requirements, and contractual obligations governing both parties throughout the policy term.
- Insured's Duties After a Loss: Providing prompt notice, protecting property from further damage, showing damaged property, providing records, and submitting a signed, sworn proof of loss within 60 days.
- Valuation Clauses: Determining whether claims are settled at Actual Cash Value (ACV) or Replacement Cost (RC).
- Cancellation & Non-Renewal: Notice requirements mandated by Florida law.
- Appraisal Clause: The binding mechanism used to resolve disputes over the financial amount of loss without resorting to litigation.
- Subrogation Rights: The insurer's right to pursue recovery against liable third parties.
- Other Insurance: How losses are shared if multiple policies cover the same property (pro-rata liability or primary/excess).
Exclusions
The Exclusions section explicitly removes coverage for specific perils, hazards, property types, or loss scenarios. Exclusions exist to eliminate uninsurable catastrophic risks, remove coverage better provided by other specialized policies, and control moral hazards.
- Common Property Exclusions: Flood, surface water, water backup through sewers/drains, earth movement (earthquake, landslide), sinkhole collapse (unless covered by endorsement or statutory catastrophic ground collapse), intentional acts committed by an insured, neglect, ordinary wear and tear, rust, mold (except limited statutory amounts), war, and nuclear hazard.
Supporting Components: Definitions & Endorsements
- Definitions: Clarifies specialized terms used throughout the contract (e.g., "You" and "Your", "Bodily Injury", "Property Damage", "Occurrence", "Residence Premises"). Precise definitions prevent ambiguity under adhesion rules.
- Endorsements (Riders): Written legal amendments attached to the baseline policy form that add, delete, modify, or clarify coverage terms. Under contract law, endorsements supersede and take precedence over conflicting baseline policy language (e.g., Florida Hurricane Deductible Endorsement, Water Backup and Sump Overflow Endorsement).
| DICE Component | Primary Function | Typical Adjuster Inspection Focus |
|---|---|---|
| Declarations | Identifies who, what, where, limits, deductibles | Verify named insured, property address, and effective dates |
| Insuring Agreement | Establishes affirmative promise of coverage | Determine whether the peril is covered under named or open perils |
| Conditions | Defines duties and procedural rules | Check prompt notice, mitigation, and timely sworn proof of loss |
| Exclusions | Carves out uninsurable or specialized perils | Evaluate whether loss was caused by excluded flood, earth movement, or wear |
| Endorsements | Modifies, expands, or restricts base policy | Check for Florida-specific amendatory endorsements altering standard terms |
2. Standard Policy Conditions Every Adjuster Applies
"Conditions" is the C in DICE, and it is where most coverage defenses live. A condition precedent must be satisfied before the insurer owes performance; failure to satisfy one can defeat an otherwise covered claim. These clauses recur across property, auto and liability forms, so learn them once.
| Condition | What It Requires | Why It Matters at the Claim |
|---|---|---|
| Duties After Loss | Prompt notice, protection of property from further damage, an inventory of damaged property, cooperation, submission to examination under oath, and a sworn proof of loss on request | The most common basis for a denial or a reservation of rights |
| Insurable Interest and Limit of Liability | The insurer pays no more than the insured's interest at the time of loss, and never more than the applicable limit | Frames every settlement calculation |
| Concealment or Fraud | Voids the coverage for an insured who intentionally conceals or misrepresents a material fact, before or after a loss | Supports a post-loss void where an inflated inventory is proved |
| Appraisal | Either party may demand appraisal of the amount of loss when coverage is not in dispute | Resolves valuation without litigation; cannot decide coverage |
| Other Insurance | Allocates a loss among policies covering the same interest — pro rata by limits, excess, or primary/excess by contract | Governs contribution between two carriers on the same loss |
| Subrogation (Transfer of Rights) | The insurer succeeds to the insured's recovery rights against a responsible third party after payment | The insured may not release the tortfeasor without impairing it |
| Assignment | The policy may not be assigned without the insurer's written consent, and Florida bars post-loss assignment of residential and commercial property benefits under F.S. § 627.7152(13) | Determines who has standing to be paid |
| Abandonment | Property may not be abandoned to the insurer | The insured cannot force a total-loss settlement by walking away |
| Suit Against Us / Legal Action | Suit is barred unless the insured has complied with all policy terms and files within the contractual or statutory period | A compliance defense that is independent of the merits |
| Loss Payment and Cancellation/Nonrenewal | Sets the payment window after agreement, and the notice an insurer must give to cancel or nonrenew | Florida layers statutory notice periods on top of the policy text |
Mortgagee, Loss Payee and Additional Insured Interests
A standard (union) mortgage clause creates a separate contract between the insurer and the mortgagee. The mortgagee's right to be paid survives acts of the named insured — including arson or fraud by the owner — provided the mortgagee pays any premium due, submits its own proof of loss, and gives notice of a change in ownership or occupancy. A loss payable clause on personal property, by contrast, gives the payee no greater rights than the insured has. An additional insured on a liability policy receives coverage for its own vicarious exposure arising from the named insured's work, but does not gain the named insured's duties or limits automatically.
An adjuster reviewing a property claim needs to verify the named insured, policy period, physical location of the insured risk, coverage limits, and applicable deductibles. Which section of the policy contract contains this information?
A homeowner's dwelling burns and the mortgagee submits its own proof of loss. The insurer's investigation establishes that the named insured set the fire. Under a standard mortgage clause, what does the insurer owe the mortgagee?