Introduction

Insurance policies are legally binding contracts between an insurance company and a policyholder that establishes the details of coverage, specifying the conditions or perils and compensation provided should they occur. A fire insurance policy is a specific type of property insurance which covers the insured in the event their home is lost or damaged during a fire. It is a common investment and is often required and included as part of a homeowners insurance policy when a mortgage is approved. The indemnity is subject to change depending upon the policy. One should confirm with the insurer about the types of risks covered, since one cannot insure the property against all types of risks of fire. Fire Insurance Definition Fire insurance means insurance against any loss caused by fire. Section 2(61) of the Insurance Act defines fire insurance as follows: Fire insurance business means the business of effecting, otherwise than incidentally to some other class of business, contracts of insurance against loss by or incidental to fire or other occurrence customarily included among the risks insured against in fire insurance policies. Characteristics of Fire Insurance 1.Fire insurance is a contract of indemnity. The insurer is liable only to the extent of the actual loss suffered. If there is no loss there is no liability even if there is a fire. 2. Fire insurance is a contract of good faith. The policy-holder and the insurer must disclose all the material facts known to them. 3. Fire insurance policy is usually made for one year only. The policy can be renewed according to the terms of the policy. 4. The contract of insurance is embodied in a policy called the fire policy. Such policies usually cover specific properties for a specified period.

AIMS AND OBJECTIVES of fire insurance

AIMS AND OBJECTIVES 1) Creating awareness about need for protection against losses due to fire. 2) Minimize losses to life and property by providing adequate means of fire protection. 3) Arrange for incentives for taking adequate means of lire Protection such as Insurance rebates. 4) Help in the creation of Standards for Fire Protection in India and encourage its implementation. 5) Encourage those contributing to the cause of Fire Protection in India through awards etc. 6) Address the concerns and common issues of our members. 7) Explore and encourage all the avenues for creating a safe and fire- free India. 8) Providing a common forum to the industry for discussing relevant issues. 9) Establish library, testing and training center research Center etc. for fire protection industries in India. 10) To organize seminar, conference and training programs etc. to promote technical knowledge among theMembers. 11) To maintain liaison and cordial relations with other national and international professional bodies having similar orAllied aims &objectives. 12) To interact with various Govt. Agencies to promote the aims and objectives of society 13) To enunciate just and equitable principles to govern the trade in fire fighting equipments the trade in fire fightingEquipments and to set up a code or codes of practices for the general guidance of manufactures, traders andExporters of aforesaid goods and further to simplify transactions relating to exports of said goods. 14) To advise or represent to Government, Local Authorities and Public bodies on; A) The policies and the measures including direct and indirect taxation, adopted by them in relation to their effectOn industry or commerce. B) To prepare, edit, print, publish, issue, acquire and circulate books, papers, periodicals, gazettes, circulars andOther literature relating to or being upon industry trade or commerce pertaining to fire fighting equipments C) To send Trade Missions to Foreign Countries. D) To collect statistics and other information regarding the production, trade or ultimate use of fire fighting equipments inVarious countries,E) To promulgate information useful to manufacturers and traders of fire fighting equipments by letters, discussion,Books, correspondence or otherwise. F) To communicate with chambers of Commerce and other mercantile and public bodies throughout India and connectAnd promote measures for the promotion and advancement of manufacture and trading of fire fighting equipments.

Scope of fire insurance Ordinary scope

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, flood and impact damage.

 Damages caused due to bursting or overflowing of water tanks, apparatus and pipes Bush Fire

Special scope
The fees paid to the architect, surveyor or consultant engineer, if such fees exceeds more than 3% of the claim money. The expenses incurred in connection with removal of wastages from the construction site, if that amount exceeds more than 1% of the claim money. Loss to the goods kept in the cold storage due to fluctuations in electricity/power but within the causes stated in the policy. Loss arising out of earth-quake, fire or combustion. Forest fire. Loss due to falling the goods from fork lifts, or from own vehicle of the insured, etc. Loss due to spontaneous combustion.

Finding
Specific Policy A specific policy is one under which the liability of the insurer is limited to a specified sum which is less than the value of property. Valued Policy A valued policy is one under which the insurer agrees to pay a specific sum irrespective of the actual loss suffered. A valued policy is not a contract of indemnity.

Average Policy Where a property is insured for a sum which is less than its value, the policy may contain a clause that the insurer shall not be liable to pay the full loss but only that proportion of the loss which the amount insured for, bears to the full value of the property. Such a clause is called the average clause and policies containing an average clause are called average policies. The phrase subject to average is equivalent to the insertion of an average clause. Lloyds Fire Policies are usually expressed to be subject to average. Reinstatement or replacement Policy In such policies the insurer undertakes to pay no the value of the property lost, but the cost of replacement of the property destroyed or damaged. The insurer may retain an option to replace the property instead of paying cash. Floating Policy When one policy covers property situated in different places it is called a floating policy. Floating policies are always subject to an average clause. Combined Policies A single policy may cover losses due to a variety of cases, e.g. fire together with burglary, third party losses, etc. A fire policy may include loss of profits, i.e. the insurer may undertake to indemnify the policy holder not only for the loss caused by fire but also for the loss of profits for the period during which the establishment concerned is kept closed owing to the fire.

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