fIRE iNSURANCE

Presented by-Nitika Dhyani

Definition FIRE INSURANCE Fire insurance is that insurance

contract which take place against fire and other risk which are mentioned in the fire insurance contract.

Condition for getting claim

1. There must be actual loss.

2. Fire must be accidental and non-intentional

Nature of fire insurance Written contract –between insurer and

insured Two parties-insurer and insured. Repayment of sum assured is not

nessary-if there is no loss of property due to fire during the period of insurance,no payment is made.

Fire insurance policy is for a period of one year, after which it is to be renewed form time to time.

Premium may be paid in lump sum or installments.

Period of insurance

a contract of indemnity

The insured can, in the event of loss recover the actual amount of loss form the insurer

A person is not allowed to gain by insurance.

Only protection element Protection element is

present .it is lack of investment.

AVERAGE POLICY

Where a property is insured for a sum which is less than its value, the policy 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.

For example: A value of the property is Rs.1,00,000. It is insured for Rs.60,000 (60% of the total value)The amount of loss is Rs 60,000.The insurance company will not pay Rs.60,000 to the policyholder but will pay Rs.36,000 (60% of Rs.60,000).

VALUED POLICY

• It is usually taken where it is not easy to ascertain the value of the property.

• In this policy the indemnity is a fixed amount agreed upon at the time of signing the contract.

• The insured is benefited when the market value of the property declines , but suffer loss when the market value appreciates.

• The valued insurance policy is usually offered for such items like jewellery, furs, or paintings, which value is difficult to estimate once they are damaged or destroyed by fire.

 

SPECIFIC POLICY A specific policy is a type of policy in which the property

is insured for a specific sum irrespective of its value.

If there is loss, the stated amount will have to be paid to the policyholder.

The actual value of the subject matter is not considered in this respect.

For example: If a property is insured for Rs. 10000 though its actual value is Rs. 20000. In the event of loss to property, not more than Rs. 10000 can be recovered.

1. Insurable interest in the subject matter

1. The insured must have insurable interest in the asset insured.

2. Insurable interest must be present both at time of insurance and at time of loss.

3. The insured can be a business man, partner, mortgagee etc

FLOATING POLICY

• It is taken to cover loss on goods, which are lying in different places and the stock of which is almost continuously fluctuating.

• It is taken out for those goods which are frequently changing in a warehouse.

• Floating policies are suitable to those traders or products whose raw-materials or merchandise are lying at different localities or godowns.

• For example:-Some of the goods of other trader are kept in one godown, and few kept in another godown, some kept in the railway godown or some at the sea port open.

Comprehensive policyUnder this policy, the insurance company provides cover against any risk affecting the goods such as fire, theft, earthquake.

Reinstatement Policy

Under this policy, the insurance company pays the amount required for reinstating the damaged property.

Blanket Policy

When a single insurance policy is taken for both the fixed and the current assets, then it is called a blanket policy.

Transit Policy

When goods are sent from one place to other place and if there are chances of incurrence of loss due to fire in transit, then transit policy is taken.

Public Fire insurance companies in India

Private fire insurance companies in India