Notice of Loss

This must be
immediately
given, unless
delay is waived
expressly or Prerequisites to Recovery
impliedly by the
insurer.

Must be given
according to the
best evidence Liability on the part of the insurer will ensue
available. Delay Proof of Loss Yes only if there is a hostile fire. A hostile fire is
may also be one that is uncontrolled.
waived expressly Fire Hostile Fire?
or impliedly by No No liability for "friendly fire".
the insurer

If fire results, the loss is compensable

Insurer is entitled to rescind the contract.
Requisites:
(1) The alteration is on the use or condition of
the thing insured;
(2) The use or condition of the thing insured
is limited to the policy;
(3) The alteration is without the consent of
the insurer;
(4) The alteration is within the control of the Yes
insured; and
(5) The alteration increases the risk.
There is an increase in the hazard or risk if
there is substantial change of conditions
affecting the risk as materially to increase it.
However, mere negligence temporarily
endangering the property does not violate
the law.
Does not affect the insurance. No
In a valued policy, the valuation fixed in the
policy shall be binding on the parties. The
rule is the same in marine insurance. Hence,
a valuation in a policy of fire insurance is
conclusive between the parties thereto in
adjustment of either partial or total loss, if
the insured has some interest at risk, and
there is no fraud on his part; but a valuation
fraudulent in fact, entitles the insurer to
rescind the contract.
An independent appraiser may be required to
fix the value of the thing insured.
Yes because fire is the immediate cause so long
as lightning is not an excepted peril.
Lightning Did it result to fire?
No Loss may still be covered even if no results.
Direct Loss
In some insurance policies, the coverage for
windstorm stipulates that velocity of the
wind. However, evidence of velocity is often
Windstorm
absent, so currently the peril is considered in
terms of effect rather than establishing a
condition. Fire insurance covers not only damage or
loss by fire but also allied risks if they are
covered by extensions and separate
Non-Fire Tornado policies.
Alteration in the Use or Condition
Increase in Risk of Loss? The coverage for earthquake is usually
of a Thing Insured covered by a separate policy or extension
rather than part of an existing coverage
because it will increase the cost of policy to
Earthquake
Coverage the point that it would not be equitable.
Hence, earthquake peril is always an
exclusion from an ordinary fire insurance
policy.
FIRE INSURANCE
Other Allied Risks
This insurance may provide that the insurer is
liable for the loss suffered consisting of loss
of earnings comprising of the net profits that
Business Interruption Insurance
could have bee realized had the business
Valued Policy
continued and expenses that continue
despite the interruption of the business.
The indirect or consequential losses arise
out of the loss of use of the property.
Indirect Loss This insurance covers extraordinary
Extra Expense Insurance expenses that may be incurred in an effort to
Kinds of Policy avoid any interruption of service.

In an open policy where there is no valuation Rent Insurance This protects the insured from loss of rental
in the policy, the measure of indemnity in an income.
insurance against fire is the expense it would
be to the insured at the time of the Open Policy
commencement of the fire to replace the
thing lost or injured in the condition in which
at the time of the injury.

The parties may stipulate that the insurer

may cause the repair, rebuilding, or
replacement of the buildings or structures
wholly or partially destroyed or damaged. Option to Rebuild Clause

This clause operates as a wholesale check

upon the insured in estimating the value of
the damaged goods.

The fire insurance policy cannot be

transferred without the consent of the
insurer. Even if the alienation is allowed in
the insurance policy, it is also required that Structure of Insurance Policy
the transferee has insurable interest over the Clauses
insured property. Non-Alienation Clause

However, the "non-alienation clause" is not

violated by the execution of a chattel
mortgage. There is no alienation within the
meaning of the clause by the mortgage of
the property until foreclosure.

A co-insurance clause may likewise be

inserted in a fire insurance policy. There will Co-insurance Clause
be no co-insurance without such express
stipulation.

A policy may expressly exclude war,

invasion, civil commotion, or to the abnormal
War and Related Risks
conditions arising therefrom from the perils
insured against.
Exceptions

Even in the absence of stipulation, the

insurer may refuse to pay if the loss was the Intentional Act
result of intentional act of the insured. Exceptions and Warranties

In addition to statutory provisions regarding

alterations, the insurance policy may likewise Warranties
include express warranties regarding the use
and condition of the insured premises.