Fire Insurance in India & Types of Fire Insurance Policies

Fire Insurance is a contract between the insurer and the insured to compensate for the loss which occurs by the fire in return of the consideration (Premium) which is paid by the insured. Fire insurer shifts the burden of fire losses from its actual victims over all members of the society which has taken this insurance. The individual by taking fire insurance could prevent the loss to some extent. The party responsible to indemnify the loss of the property insured is called the insurer and the party who is to be indemnified is called as insured.

The insurer issues a policy which bears all the terms and conditions of the contract. The policy contains the name and addresses of the insured, the subject – matter of the insurance, the sum insured, the term and the premium. The premium rate is determined according to the nature, location, construction of the property.

Who can take fire insurance policy?

Any person / firm / organisation / institution who may suffer financial loss in the event of fire

  • Owners of Building and contents such as house hold articles, furniture etc.
  • Shop Keepers & Godown Keepers.
  • Educational, Research, Banks , financial,  Trustees, Charitable Institution  .
  • Hotels, Boarding, Lodgings, Hospitals, Clinics and other such service providers.
  • Industrial and Manufacturing Firms.
  • Transporters.

Coverage Included under Fire Insurance

Fire Aircraft Damage

 

Subsidence and landslide including Rock slide
Lightning

 

Riot, Strike, Malicious Damage

 

Bursting and overflowing of water tanks, apparatus and Pipes
Explosion/Implosion

 

Impact damage

 

Leakage from Automatic Sprinkler Installation
Storm, Typhoon, Hurricane, Tornado, Flood and Inundation Missile testing operations Bush Fire

Some Important Types of Fire Insurance Policies:

Specific policy: When a specified sum is insured upon a specified property for a specified period, the whole actual loss does not exceed the insured amount.

Comprehensive policy: This policy undertakes full protection not only against the risk of fire but combining with the risk against theft, burglary, riot, civil commotion, damage from pest, lighting.

Valued policy:  The value of the property to be insured is determined at the inception of the policy. In this policy, measure of the indemnity is based on the value of the properties rather than their market value means the measure of indemnity depends upon the value agreed at the inception of the policy.

Floating policy: this policy is taken to cover one or more kinds of goods at one time under one sum assured for one premium and in relation to the same owner. This policy is useful to cover fluctuating stocks in different localities.

Valuable Policy: Valuable policy is the policy whose claim amount is to be determined at the market price of the damaged property.