Fire Insurance in a nutshell
Fire Insurance in a nutshell
Riya: What Is Fire Insurance?
FInvesTree: A fire insurance policy is a type of property insurance policy, which covers the damages and losses caused to a residential or business property due to fire. This policy enables the policyholder to claim compensation for costs incurred towards repairing, replacing, or reconstructing a property damaged in a fire. Since it is not possible to predict the estimation of losses due to a fire, insurance providers issue fixed-value compensations when policyholders file claims. Therefore, you get the maximum sum assured when you file your claim for fire insurance.
Riya: Ok, can I buy additional Fire Insurance coverage?
FInvesTree: Most policies come with some form of fire protection.
Purchasing additional fire coverage helps to cover the cost of replacement, repair, or reconstruction of property above the limit set by the property insurance policy. Fire insurance policies typically contain general exclusions such as war, nuclear risks, and similar perils. Damage caused by a fire set deliberately is also typically not covered.
Riya: Any more special thing I need to know at the moment?
FInvesTree: A policyholder should check their home's value each year to determine if they need to increase their coverage amount. Keep in mind that you cannot get insurance for more than a home's actual value. Insurance companies may offer standalone policies for rare, expensive, and irreplaceable items that are otherwise not covered in standard fire insurance.
Riya: What type of property is covered by fire insurance?
FInvesTree: Typically any damage to your home or the contents of your home that is damaged by a fire will be covered by fire insurance. This includes property covered by candle fires, grease fires, electrical fires and others.
A fire insurance policy will not cover losses related to fires set deliberately. Fire insurance also only covers losses related to a fire, so if your property suffers loss or damage from another cause, it would not be covered.
Who can Opt for Fire Insurance Policy?
FInvesTree:
- Any person/institution /firm/organisation/ who may expose to financial loss or damage in case of a fire outbreak
- Owners of Buildings and contents such as household articles, furniture etc.
- Warehouse keepers and shopkeepers
- Educational institutions, research institutions, Bank or other financial, institutions, trusts, charitable institutions
- Hospitals, hotels, clinics, lodging and boarding canters or other related service providers
- Manufacturing firms, industrial entities
- Transporters
Riya: Is there any Add-on covers or Riders with fire insurance policy?
FInvesTree: You can can access your needs and risk exposure and purchase a wide range Add-on. They are as under
- Spontaneous combustion caused due to fire rider
- Earthquake (Fire and Shock) rider
- Forest Fire rider
- Impact damage caused by the insured’s own vehicle cover
- Stock deterioration in cold storage premises either due to accidental power failure or change in temperature add-on cover
- Architects, consulting engineers, and surveyors’ fees (exceeding 3% of the claim amount) add-on cover
- Debris removal (exceeding 1% of the claim amount) add-on rider
- Omission to insure, alterations, additions, or extensions add-on cover
- Spoilage material damage (only applicable to machinery and stock containers) cover
- Contamination and leakage cover
- Loss of rent cover
- Temporary removal of stocks cover
- Additional expenses of rent cover for a substitute accommodation cover
- Start-up Expenses add-on rider
Riya: Anything which Fire insurance policy does not cover?
FInvesTree: Riya, you should read every insurance document carefully, you should pay special attention to a fire insurance plan too, as it includes several exclusions. They are:
- The first 5% of every claim, subject to a minimum of Rs. 10,000 for each loss arising due to “Act of God Perils” like lightning, storms, tempest, floods, typhoons, cyclones, landslides, rock slides, etc., as covered under the policy.
- The first Rs. 10,000 of every loss arising due to other perils, as indemnified by the policy. The excess amount is applied per insured, per event.
- Loss, damage, or destruction caused as a result of war and kindred perils like invasions, military revolutions, civil commotions or civil wars, rebellion, etc.
- Loss, damage, or destruction directly or indirectly caused to property insured, as a result of nuclear peril
- Loss, damage, or destruction caused to the property insured owing to pollution and contamination
- Loss, damage, or destruction caused to any electrical apparatus, machines, fitting or fixtures (excluding electrical wiring and fans) arising due to or occasioned by short circuits, over-running, excessive pressure, self-heating, electricity leakage, for any reason (including lightning).
- Loss due to delay, loss of earning, loss of market and other consequential or indirect damages or losses of any kind or disruptions whatsoever.
- Losses arising due to earthquake and volcanic eruptions are also part of Standard fire policy exclusions. That said, one can avail coverage against these natural phenomena by paying an additional premium, by opting for the earthquake (fire and shock) add-on rider.
- Loss, damage, or destruction caused due to terrorism activities, unless the policy holder opts for the terrorism cover add-on rider.
- Loss or damage caused due to spoilage resulting from the interruption, delay, or cessation of any operation or process, caused by the operation of any of the above-mentioned perils.
- Losses caused due to theft during or after an insured peril occurs, expect as provided under strikes, riots, malicious and terrorism damage covers.
- Losses or damages endured by the insured property, if removed to any place or building other than in which it is stated to be insured herein, except machinery and equipment removed temporarily for repairs, renovation, cleaning or other such purposes, for a period of up to 60 days.
Riya: How many different types of Fire Insurance Policies are there?
FInvesTree: Yes, there are different types of fire insurance policies. They are
- Valued Policy
- Specific Policy
- Average Policy
- Floating policy
- Excess Policy
- Blanket Policy
- Comprehensive Policy
- Consequential Loss Policy
- Reinstatement Policy
- Open Declaration Policy
Riya: Thanks for letting me know about all the details of fire insurance.
FInvesTree: Most welcome, still if you want to know more detail or want to do fire insurance you can contact us
+91 93997 98706
services@finvestree.com
www.finvestree.com
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