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Fire Insurance, where to buy and features

  • Fire insurance is a legal contract between an insurance company and the policyholder which guarantees that any loss or damages caused to the policyholder's property in a fire will be paid by the insurance company.
  • Fire insurance provides coverage against incidents of accidental fire, lightning, explosion, etc.
  • Fire insurance may be capped at a rate that is less than the cost of the losses accrued, necessitating a separate fire insurance policy.
  • The policy pays the policyholder back on either a replacement-cost basis or an actual cash value basis for damages.

Why should you buy Fire Insurance?

  • Our business are always prone to risks and fire eruption and fire insurance provides a comprehensive protection against damages caused due to fire explosion and other risks.
  • Besides fire related activities, it also protect damages caused due to any natural calamity, bursting of water tanks, theft etc.
  • The built in covers include alterations or extensions, stocks on floater basis, temporary removal of stock, cover for specific contents, start-up expenses, professional fees, costs for removal of debris and costs compelled by Municipal regulations.

What are the features of Fire Insurance?

Let's have a look at some features:

  • Risk Surveys for clients that help in controlling the risk exposure and managing them in a professional manner. In the long run, the clients benefit from this in terms of the "better insurance pricing" and "low loss incidents".
  • Policy brings clarity and flexibility to the client to pick and choose covers, suitable to exposures.
  • Add on covers supports the exigencies of the today’s insurance requirements and meet some special insurance demands, which make the product wholesome and comprehensive.

How does insurance reduce your financial risk?

Imagine you’re driving your car and you hit a deer, which damages your car. If you have the right kind of auto insurance policy, the insurance company will pay the costs of the car repairs (minus the deductible — the portion you have to pay). Now, imagine a water pipe bursts in your bathroom, ruining everything in that room and in the bedroom next to it. Typically, if you have homeowner’s or renter’s insurance, the insurance company will pay to replace some or all of the damaged property, once you pay your deductible. Insurance policies will only pay for things that are described in the policy. So, it’s important to read a policy carefully before you buy it, so you’ll know exactly what’s covered.

What are the Types of Fire Insurance policy?

On the premise of the necessities, the following types of fire insurance policy can be availed, which are:

  • Specific Policy: Under this policy, for a certain property, a specified sum insured is determined and in case of any loss, the compensation will be provided for the loss provided it is less than the determined amount.
  • Comprehensive Policy: This policy provides extensive coverage not only against fire-related activities but also provides coverage against any other activities, such as robbery, burglary, civil rampage, etc.
  • Valued Policy: At the initiation of the policy, the value of a particular property is determined.
    On the premise of the value of the property, the insurance of the policy is decided wherein the insurer will pay the value in the case of destruction of property by fire.
  • Floating Policy: This type of policy is best suited for owners who run a business of import and export.
    This policy will provide you with coverage securing your goods lying at various places.
    It is to be noted that the goods need to belong to the same individual under one sum assured and one premium covering all the activities related to the goods.
  • Consequential Loss Policy: A fire-outbreak in a workplace like in a factory may disrupt the workforce that is production might go down but the fixed expenses continue at the same price.
    This policy essentially provides coverage for consequential loss or loss of profits.
    On the premise of loss of sales, the loss of gains is calculated.
  • Replacement Policy: In this policy, the insurance provider assures compensation for the loss of the premise of the property’s market value.
    After contemplating the depreciating value o the property, the amount that is to be compensated is calculated.
    The compensation provided will be at the replacement price, which implies that the new asset will be of the price that has been lost.
    It is to be noted that there will not be any additional expense as the compensation provided will be on the new asset’s market price.

What are the best Fire insurance Companies?

Some of the best Fire insurance Companies:

  • Amica
  • USAA
  • State Farm
  • Allstate

  • What are the Factors to Consider When Choosing a Fire Insurance Company?

    Consider these factors for sure before enrolling into one. Detailed data can be found on each and every Sub-Insurance category.

    • With fire insurance, you can have financial protection against unforeseen damage.
    • It covers the loss caused due to destruction of moveable and immoveable property out of fire or other activities.
    • There are different types of property covered under such policy are machinery, plant, building, stock and content like fixtures, furniture and cables and so on.
    • These policies are issued for the period of one year with some exceptions like for dwellings.
      In the case of dwellings, a policy may be issued for the long term specifically for a period of three years at least
    • There are various other activities taken into consideration regarding fire insurance.
      It may cover explosions, lighting, bursting of water tanks, landslide, subsidence and impact damage
    • Remember, loss caused due to war and warlike operations, burglary and housebreaking, breakdowns, nuclear activities, electrical/mechanical breakdowns and pollution or contamination are not covered.

    What is Covered under Fire Insurance?

    Having explained what is fire policy, let’s understand the type of coverage you can get when you file an insurance claim, along with its inclusions.
    A fire insurance policy covers you against the losses arising due to an accidental fire, as per the policy’s terms and conditions.
    The coverage is limited to the value of the policy and not as per the extent of damage sustained by the policyholder.
    Typically, you can get coverage against:

    • The actual loss of goods caused by the fire
    • The loss of any adjacent property or building caused due to the fire in the insured property
    • Additional everyday expenses affected due to the damage endured by your property
    • Compensation amount paid to the firefighters
    • The fire triggered due to electricity issues
    • Damage caused due to overflowing pipes or water tanks.

    What is NOT-Covered under Fire Insurance?

    While you should read every insurance document carefully, you should pay special attention to a fire insurance plan as it includes several exclusions.
    They are as under:

    • The first 5% of every claim, subject to a minimum of Rs. 10,000 for each loss arising due to Act of God like lightning, storms, tempest, floods, typhoons, cyclones, landslides, rock slides, etc., as covered under the policy.
    • The first Rs. 10,000 of every loss arising due to other activities, as indemnified by the policy.
      The excess amount is applied per insured, per event.
    • Loss, damage, or destruction caused as a result of war and kindred activities like invasions, military revolutions, civil commotions or civil wars, rebellion, etc
    • Loss, damage, or destruction directly or indirectly caused to property insured, as a result of nuclear activity
    • Loss, damage, or destruction caused to the property insured owing to pollution and contamination
    • Loss, damage, or destruction caused to any electrical apparatus, machines, fitting or fixtures (excluding electrical wiring and fans) arising due to or occasioned by short circuits, over-running, excessive pressure, self-heating, electricity leakage, for any reason (including lightning).
    • Loss due to delay, loss of earning, loss of market and other consequential or indirect damages or losses of any kind or disruptions whatsoever.
    • Losses arising due to earthquake and volcanic eruptions are also part of Standard fire policy exclusions. That said, one can avail coverage against these natural phenomena by paying an additional premium, by opting for the earthquake (fire and shock) add-on rider.
    • Loss, damage, or destruction caused due to terrorism activities, unless the policy holder opts for the terrorism cover add-on rider.
    • Loss or damage caused due to spoilage resulting from the interruption, delay, or cessation of any operation or process, caused by the operation of any of the above-mentioned activities.
    • Losses caused due to theft during or after an insured activity occurs, expect as provided under strikes, riots, malicious and terrorism damage covers.
    • Losses or damages endured by the insured property, if removed to any place or building other than in which it is stated to be insured herein, except machinery and equipment removed temporarily for repairs, renovation, cleaning or other such purposes, for a period of up to 60 days.

    Fire Insurance Premium and Premuim Calculator.

    Upon the payment of an additional premium, the insured can benefit the following add-on coverage:

    • Earthquake
    • Wreckage removal
    • Forest
    • Fire Loss of rent
    • Start-up cost
    • Alternate accommodation
    • Unconstrained burning
    • Damage to stock due to change of temperature
    • Leakage and contamination cover
    • Architect, engineers, Surveyors consultation fee
    • Cover for molten metal spillage
    • Impact loss owing to insured’s own road/rail transit

    Though the premium varies with Company, Age, location and many more, you still can get a basic idea by calculating here.

    What are the benefits of Fire Insurance Policy?

    Fire insurance has been designed to reimburse the cost of repair, reconstruction or replacement of the property damaged or destroyed in a fire.
    Besides, fire insurance also covers property loss or damages due to smoke, water and damages caused by the firefighters.

    What are the documents required Fire Insurance Policy?

    In the event of a Fire activity, the policyholder needs to submit certain documents as mentioned below:

    • Duly filled claim form.
    • Certified copy of the policy.
    • Photographs of the damaged property.
    • Fire Brigade report.
    • Copy of Police FIR report (if any)
    • Copy of newspaper report (if any)
    • Previous claim history (if any)/li>

    What are the steps for Renewal of Fire Insurance Policy?

    Renewal step vary from broker to broker, however they don’t differ much. Follow these steps

    • Visit the official website of the broker.
    • Go to the ‘Renew Your Policy’ option on the menu bar and click on 'Fire Renewal'
    • Log in to the website by entering your registered mobile number or policy number
    • Fill up other required details regarding your policy
    • Add/remove any coverage, family member or change the sum insured if desired
    • Make the payment for the renewal premium online via debit card/ credit card/ net banking
    • Once your payment is successful, you will be issued a digitally signed copy of the policy. The policy document can be downloaded and printed anytime.