Fire Insurance

Fire Insurance 

This policy offers protection against loss or damage of property/ materials caused by fire. The insurance should be taken for a maximum amount of its current value after considering factors of wear and tear as well as depreciation.

Suitable for...
Risks covered
Compensation Offered
Exclusions
Suitable for...

This policy is vital for every individual or corporate body with respect to the property where they have insurable interest. Since insurable interest signifies the right to insure, the person or corporate body must be legally competent to enter into a fire insurance contract.

Policies A and B are intended for householders, office establishments, hoteliers and shopkeepers.

Policy A is also ideal for small manufacturing units and cottage-scale industries.

Policy C is apt for industrial/ manufacturing concerns as well as warehousing establishments.

All these policies can cover the interests of banks and financial institutions.

Risks covered

Perils Covered Policy
Fire, lightning, explosion/ implosion Covered under all 3 sections
Riot, strike, malicious, terrorist damage, impact, aircraft damage Can be excluded from Policies B and C, and discount in premium availed
Flood, storm, tempest, subsidence, landslide, earthquake, fire, shock Covered only under Policy A, but on payment of additional premium can be covered under Policy C
If additional premium is paid, then extraneous perils like deterioration of stocks due to power failure, leakage and contamination, sprinkler leakage, spoilage of material, subterranean fire, forest fire, missile testing operations can also be covered.

Compensation Offered

The policy pays for cost of repairs replacement/ reinstatement of the item lost/ damaged based on actuals.

However, the market value of the item lost and the adequacy of the sum insured will govern the settlement.

Where buildings, plant and machinery are covered on a reinstatement value basis, the "Cost When New" of the building, plant and machinery erected on the same site would be the basis.

Exclusions

The policy will not pay claims arising from

Theft during or after the occurrence of any insured peril.

Any heating / drying process.

War or nuclear perils.

Electrical breakdowns.

Ordered burning by a public authority.

Subterranean fire.

Loss or damage to bullion, precious stones, curios (>Rs.10,000/-), plans, drawings, money, securities, cheque books, computer records unless specifically included.

Loss or damage to property moved to a different location (except machinery and equipment for cleaning, repairs or renovation for more than 60 days).
Under policy A, mere cracks without collapsing of whole or part of the building are excluded.

Under policy C, curios valued at more than Rs.2,500/- cannot be claimed for and the first Rs.10,000/- of any specific loss is not payable either.

Also, loss due to natural heating, spontaneous combustion, fermentation as well as damages to goods held in trust or on commission are not payable under policy C.