Fire Insurance

Fire insurance is a type of insurance that provides coverage for property damage and loss caused by fire. It helps to protect the policyholder from financial loss due to fire damage to their home, business, or other insured property.

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What is Fire Insurance?

Fire Insurance is the type of insurance which provides coverage for loss or damage caused by fire to your property. It can be bought as a part of property insurance or even as standalone insurance. As the estimation from fire loss is unpredictable, the policy will be issued with a fixed compensation. The insured will receive the amount agreed upon the time of claim during a fire accident. Even home owners can take a fire insurance to protect the structure of their homes. It also covers the cost of replacing items in the house such as AC, television, and other electronic gadgets.

Types of Fire Insurance

There are different types of fire insurance policies available with different scope of coverage. Check your requirement and purchase the one that fits your needs,

Valued Policy

At times, it is difficult to gauge the exact loss during a fire accident, a valued policy is issued. A valued policy is a type of policy where the value of commodities is fixed at the time of purchase of policy. In the event of fire accident, the policyholder will receive the amount agreed upon at the time of purchase of policy not the actual value (eg: Jewellery and other items whose market value fluctuates)

Floating Policy

If you have multiple branches of your office/godown in different locations, you can opt for a floating policy. With the help of this single policy, all the goods lying in different locations can be insured together. Thereby, you can eliminate the need for buying multiple insurance policies.

Specific Policy

With this policy, the maximum payable by the insurance company is fixed in advance. In the event of an unfortunate event like an accident, the amount equivalent to the prefixed amount or the amount of the damaged item whichever is less is settled. For example, if you bought a policy with 3 Lakhs as fixed limit and you incurred a loss of 4 lakhs in an accident, then the insurance company will pay you the agreed amount of Rs. 3 Lakhs.

Comprehensive Loss Policy

It may occur to the insurer that he/she may want to insure their goods against all possible risks like fire, burglary, theft, explosion, and similar reasons. In such cases, it’s better to go for comprehensive policy otherwise known as all risk policy, which will help you take care of all possible risks.

Average Policy

If you are taking a policy less than the value of the property, then the insurer imposes the “Average Clause” as a penalty for under insuring your property. If the value of your property is Rs. 40 Lakhs and you are insuring it for only 20 lakhs, then the insurer will only Rs. 20 lakhs in case of a fire accident.

Consequential Loss

After a fire accident, loss of goods is not the only loss that may grieve you. Because of the loss of machinery and equipments, you may lose production. The loss of production is a consequential loss. By buying consequential loss coverage, you may claim such indemnity which can make up for the consequential loss.

Replacement Policy

In case of total destruction of property due to fire, you may need to find a new property to restart your business.

Coverage Offered under Fire Insurance

Loss of Goods due to fire accident
Living expenses due to the damage of the insured property
Loss to the adjacent buildings or property near the accident site
Fee to the firefighters
Fire triggered by electricity

Exclusions in a Fire Insurance Policy

Fire caused by war or nuclear risks, riot or earthquake
Intentional arsoning by enemies
Underground Fire
Loss of goods due to theft after fire
Human-made causes of fire with malicious intent

How to Raise a Claim for Fire Insurance?

For obtaining compensation for loss due to a fire accident, you need to raise a claim. Here is the process that you must follow in order to raise a claim,

Immediately inform the insurance company after the fire accident
Contact the police and fire brigade
Insurance company will appoint a surveyor to assess the damage
Submit the claim form with supportive document
Based on the surveyor’s report, the claim will be settled by the insurance company within 10-15 days from the date claim request was placed

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With over 55 insurance companies and hundreds of health policies, Fincover cuts through the clutter and helps you choose the one that is best for you.

FAQ

You can learn more from our asked questions

What are the assets I can include under Fire Insurance?

Building and contents such as household equipment, Furniture, fixtures, fittings, Machinery, stocks, good in case of factory can be included in your coverage.

Does the policy only fire?

Though the name of the policy is fire insurance policy, it can cover a host of other related incidents such as lightning, explosion/implosion, Aircraft damage, impact damage etc.

What is the duration of Fire Insurance Policy?

Usually, policies are insured for one year for commercial building. For residential buildings, longer durations are issued. You will have to check the respective insurer you are planning to buy for further details about the same.

If I have a comprehensive policy, Do i need to buy a separate fire insurance policy?

Not required, usually comprehensive insurance policy cover fire accidents too.