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Fire Insurance

Fire insurance is a form of property insurance which protects people from the costs incurred by fires. When a structure is covered by fire insurance, the insurance policy will pay out in the event that the structure is damaged or destroyed by fire.

Types of Fire Insurance Policies

  • Specific policy: In this type of policy, the insurance company is liable to pay a sum, which may be less than the property’s real value. The insured is called to bear a part of the loss, as the actual value of the property is not considered in deciding the amount of indemnity.
  • Comprehensive policy: Known as “all-in-one” policy, the insurance company indemnifies the policyholder for loss arising out of fire, burglary, theft and third party risks. In this type of policy, the policyholder also gets paid for loss of profits incurred, due to fire, till the time the business remains shut.
  • Valued policy: In this type of policy, the value of the commodity is already set and actual loss is not taken into consideration. The policy follows a standard contract of indemnity, wherein the policyholder gets paid a specific amount of indemnity, without considering the actual loss.
  • Floating policy: This type of policy is subject to average clause and the extent of coverage expands to different properties, belonging to the policyholder, under the same contract and one premium. The floating policy also provides protection of goods kept at two different stores.
  • Replacement or Re-instatement policy: As per replacement or re-instatement policy, the insurance company instead of paying the policyholder the amount of indemnity in cash, replaces the damaged property/commodity with a new one.

What is covered in Fire & Special Perils Policy?

  • Accidental fires, lightning, explosion and implosion due to pressure vessels (used for domestic purposes).
  • By rioting mob, striking workers, malicious acts by third parties and damage by terrorists
  • Impact damage by any rail/road vehicle or animal by direct contact.
  • Commodities damaged by water used for extinguishing fire.
  • Loss\damage caused by pulling down of adjacent buildings by the fire brigade to prevent the flames from progressing.
  • Breakage of commodities in the process of their removal from the premises where fire is intense.
  • Aircraft and other aerial and and/or space devices and/or articles dropped there from, excluding destruction or damage occasioned by pressure waves caused by such devices
  • Payments made to people employed in extinguishing fire.
  • Subsidence and landslide, including rock slide.
  • Natural calamities like storm, cyclone, typhoon, hurricane, tornado, and flood and impact damage.
  • Damages caused due to bursting or overflowing of water tanks, apparatus and pipes
  • Bush Fire

Fire Insurance Claim Procedure

  • Individuals/corporate must inform insurer as early as possible, in no case later than 24 hours.
  • Provide relevant information to the surveyor/claim representative appointed by the insurer.
  • The surveyor then analyzes the extent/ value of loss or damage.
  • The claim process takes anywhere between one to three weeks.

Documents Required

  • True copy of the policy along with schedule
  • Report of fire brigade
  • Claim Form
  • Photographs
  • Past claims experience