Fire Insurance

Types, conditions and claims

Presented by:
Bal krishna dhakad
Ashish kaithwas
Babita malviya
Devendra singh chouhan
Types Of Fire Insurance
 Excess loss policies:- This policy is obtained where the stock
fluctuate indefinitely. The trader has to obtain two policies.
Under the cover of first policy, the loss is indemnified upto the sum
insured. If the loss exceeds this limit, that can be met out from the
Excess Loss Policy.
 Standard policies:- This policy provides securities against
some fundamental risks. The premium is kept at a lower rate. This
policy has two types 1) for household goods and 2) for all other
purposes such as for factories, shops, godowns, furnitures etc. The
risks which are overlooked include loss due to natural calamities.
 Special peril policies:- In addition to ordinary risks, this policy
provides for coverage of risks involving explosion, violance, etc.
Additional rate of premium is charged for this.
 Comprehensive policies:- 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.
 Sprinkler leakage policies:- This policy insures
destruction of or damage due to accidently leaking water
from automatic sprinkler installation, used in the insured
premises to put out fire.
 Rent policies:- This policy protect the building owners
from the loss of rent. If a tenant doesn’t pay rent because
of fire in the rented portion, the insurance company will
pay for such loss. This may constitute a separate policy,
or can be included within other forms of cover and may
be affected either by the owner or by the tenant or by an
owner-occupier. If the tenant is not paying rent because
of fire, the owner can claim rent from the insurer.
 Floater declaration policies:- This type of policies
can be issued subject to minimum sum insured for
Rs. 2 crore and compliance of rules of declaration
policies.
 Long term policies for Houses/Flats:- Long term
policies shall be as per the following terms and
conditions
a) Issued to House/Flat Owner only
b) The policy shall be issued for a minimum
period of three years
 HAZARDS

 Physical hazards

 Occupational hazards

 Moral hazards

 Internal hazards

 Legal hazards
 Sum Insured
The value of property is considered while fixing the
sum insured. The property can be insured on Market
Value (Depreciated cost) or Replacement Cost basis.

 Basis of Premium
Premium rate will depend on construction of
building and occupancy. Discounts/Loadings on
premium are given based on past claims experience
for risks exceeding Rs. 50 crores sum insured at any
location and installation of fire extinguisher
appliances. The amount of premium depends on a
number of factors based on the underwriting policies
of different insurers.
Conditions On Fire Insurance Policies
1) GENERAL EXCLUSIONS
• The first 5% of each and every claim subject to minimum of
Rs.10,000/- in respect of Act of God only perils such as
lightning, STFI, Subsidence, Landslide and Rockslide.
• The First Rs.10,000/- for each and every loss arising out of
other perils.
• The excess shall apply on the basis of per event per insured.
However this does not apply to policies covering dwellings.

EXCLUDED PERILS
• War and War like perils : Loss, destruction or damage caused
by war, invasion, act of foreign enemy, hostilities or war like
operations( whether war be declared or not ), civil war, mutiny,
civil commotion assuming the proportions of or amounting to a
popular rising, military rising, rebellion, revolution, insurrection
or military or usurped power.
OTHER EXCLUSIONS
• Loss or damage caused by ionizing radiation or contamination
• Loss or damage caused by pollution or contamination excluding
a) Pollution or contamination which itself results from a peril
hereby insured against,
b) any peril hereby insured against which itself results from
pollution or contamination.
• Loss, destruction or damage to bullion or unset precious
stones, any curious or works of art for an amount exceeding
Rs.10,000/-, goods held in trust or on commission,
manuscripts, plans, drawings, securities, obligations or
documents of any kind, stamps, coins or paper money, cheques,
books of accounts or other business books, computer system
records, explosives unless otherwise expressly stated in the
policy.
• Loss or damage to stocks in cold storage premises caused by
change of temperature.

• Loss, destruction or damage to any electrical machine,

apparatus, fixture or fittings arising from or occasioned by over
running, excessive pressure, short circuiting, arcing, self
hearing or leakage of electricity from whatever cause.

• Indirect loss or consequential loss such as loss of earnings, loss

of delay, loss of market etc.

• Loss by theft or after the occurrence of any insured peril except

as provided under Riot, Strike, Malicious and Damage Cover.

• Loss or damage caused by earthquake, volcanic eruption or

other convulsions of the nature.
 • Loss or damage to property insured if removed to any
building or place other than in which it is herein stated to be
insured except machinery and equipment temporarily
removed for repairs, cleaning, renovation or other similar
purposes for a period not exceeding 60 days.

2) GENERAL CONDITIONS:
1) Policy Voidable
2) Alteration
3) Fall or Displacement
4) Warranties
5) Reasonable Precautions
6) Cancellation
3) Claims Conditions

Action By Insured:
a) In the event of damage the insured shall
- notify the insurer immediately
- notify the police authority immediately if it becomes evident
that such damage have been caused by malicious persons;
- Carry out and permit to be taken any action which may be
reasonably practicable to prevent further damage;
- full information in writing of the property lost destroyed or
damaged;
- detail of any other insurance on any other property hereby
insured immediately;
- all necessary proofs and information relating to the claim as
may reasonably be required
- if necessary, statutory declarations of the truth of the claim
and any matters connected with it
b) No claims under this policy shall be payable unless the terms

of this conditions have been complied with.

1) Condition of average (under Insurance)
2) Fraud
3) Reinstatement: If any property is to be reinstated or replaced by the
insurer the insured shall at his own expenses provide all such plans, books
and information as may reasonably be insured.
4) Insurer’s right following a claim
5) Reinstatement of sum insured after a loss
6) Contribution
7) Subrogation
8) Arbitration
Claims settlement procedure in fire insurance
 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.
◦ Presentation of necessary documents
◦ The surveyor then analyzes the extent/ value of loss or damage.
◦ The claim process takes anywhere between one to three weeks.

 Documents Required for Fire Insurance Claim :

1. True copy of the policy along with schedule.
2. Report of fire brigade.
3. Claim Form
4. Photographs
5. Past claims experience