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| WHAT IS FIRE INSURANCE |
What Is Fire Insurance ?
· Fire insuranceis property insurance that covers injuries and losses caused by a fire. The purchase of fire insurance in addition to homeowners or property insurance helps cover the cost of restoring, repairing, or rebuilding the property, in addition to the limit imposed by the property insurance policy. Fire insurance policies commonly contain normal exclusions, such as war, nuclear risk and similar risks.
Applying for fire insurance must pass two criteria in order to be met. There should be actual loss due to the fire and the fire must be accidental and not intentional.
The main features of a fire insurance agreement are:
(i) For fire insurance, the insurer must have an intangible interest in the subject of insurance. Without a fixed interest the insurance contract does not work. In the case of fire insurance, interest that is not the same as life insurance must be available both at the time of insurance and at the time of loss.
(ii) Same as a life insurance contract, a fire insurance contract is a contract of good faith i.e., berrimae fidei.
(iii) A fire insurance contract is a contract of strict recognition. An insured person, in the event of a loss, can recover the actual amount of the insured loss. This depends on the maximum number of subjects on which the subject matter is tied.
(iv) The insurer should only pay compensation if the fire is a cause of injury or loss.
TYPES OF FIRE INSURANCE POLICIES
1. Limited Policy: This is the type of policy in which the value of an insurance policy is agreed at the time of contract. The insurer must pay the specified amount or amount regardless of the amount of the loss caused by the re. A policy is prepared for that asset whose value is difficult to calculate in the event of a fire. These types of policies can be taken up with the work of art, painting, etc. When the number of damaged items turns out to be different to evaluate / measure them.
2. Average policy: A policy that contains a central clause. If the subject matter is not covered by the direct or indirect market value, then the insurer is responsible for paying that loss percentage for the insured. e.g. If the policy is taken at Rs 50,000 with a market value of Rs 100,000, the loss incurred as a result of the return is Rs 40,000, the insurance firm will pay around half 20,000 Rs(50% of Rs 40,000).
3. Defined Policy: In the case of a specified policy, the asset is issued for a denarius regardless of market value. If there is a loss, the amount stated will have to be paid to the policyholder. But the actual value of the subject matter is not considered in this case. e.g. An asset worth Rs 100,000 has been added to Rs 60,000 and the loss will be Rs 30,000 and the insurance company will pay Rs 30,000 in full as compensation.
4. FIoating Policy : This policy can be taken for those goods that are lying in different locations or deities or warehouses. As the number of assets lying in different locations fluctuates from time to time - it becomes difficult for the owner to adopt an unspecified policy so that entrepreneurs and retailers adopt a flexible policy. Such a policy is usually taken in one sum and one premium for goods lying in different locations.
5. Comprehensive Policy: The comprehensive policy covers all types of accidents such as robberies, burglaries, explosions, strikes, etc. This policy is also called a one-on-one policy. This type of policy is not popular in India but is very popular in countries like UK, USA, etc.
6. Excess policy: An additional policy is taken when the stock market price fluctuates in this case it is not advisable to take one policy for a specific amount, but instead two policies can be adopted.
i. One policy is a small amount below the stock price that has never fallen.
ii. Another policy is to make a difference / surplus (with a larger stock price) on which the price changes. e. g If the value of the stocks ranges between Rs 100,000 and Rs 130,000, then one policy is replaced by Rs 100,000 and the other policy at an excessive value i.e. Rs 30,000.
7. Reinstatement Policy: This is a type of Fire Insurance Policy in which an insurer makes a claim for property or lost property. In this policy instead of paying compensation for lost property, the property is replaced. While paying compensation, the depreciation amount of the asset is not taken into account. The premium rate is high in the Reinstatement policy.
8. Blanket Policy: The Blanket policy covers all used and current assets of a single guaranteed policy. Under this policy all assets in different locations are covered under one premium and one policy.
The loss covered by the fire insurance policy
• Damaged goods or water damaged equipment used to extinguish a fire.
• Defeat of nearby area by fire brigade to block fire progress.
• Vandalism during removal of buildings where fire is burning e.g. damage caused by dumping furniture out the window.
• Rates payable to fire fighters.
Losses that is not covered by fire insurance policy
• loss due to fire caused by earthquakes, invasions, foreign enemy action, hostility or war, civil wars, riots, martial law, military uprising or insurrection or revolt.
• Loss caused by underground (underground) fire.
• Loss resulting from the burning of property by order of any public authority.
• lost during the fire or after a fire.
• loss or damage to property caused by its swelling or automatic swelling e.g. a bomb blast because of the element in it.
• Loss or damage by light or explosion can be covered unless this results in a literal fire dump.
A fire lost claim must complete the following conditions
• Loss should be caused by the fire itself or the heat and not just at high temperatures.
• The cause of the potential loss should be fire.
• Loss or damage should be related to the policy issue.
• The disposal site must be for goods or buildings for the storage of goods.
• Fire should be accidental, not deliberate. If the fire was caused by the cruel or willful act of the circumcised or its agents, the insurer will not be liable for the loss.
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