What is Fire Insurance?
Fire Insurance is a type of insurance which covers the risk of fire. In simple words, if your property gets damaged or destroyed due to fire, fire insurance provides you the complete protection. Fire reacts rapidly with oxygen and gives off heat. With this nature, it can increase to the neighborhood or the society as well. Then it will become a massive and danger. With the help of fire insurance, the losses are compensated and the society is not losing much because fire insurance not only provides coverage for the expenses incurred for the reconstruction, replacement, and repair of the insured property but also the nearby structures. Furthermore, this fire insurance plan also protects the people whose life or livelihood is affected due to property damage.
Fire insurance policy in India is governed by All India Fire tariff which has been issued by a legal body-Tariff Advisory Committee. As per the standard plan of fire and special perils plans, all the movable and permanent properties on land can be insured. It could be anything like a house, offices, shops, industrial buildings, place of worship, malls, clinics, etc.
It is a wise decision to opt fire insurance as we have seen some cases in the last few days of fire outbreaks leading to many deaths. We are surrounded by the risk of fire; directly or indirectly. In another way we can say that electricity is everywhere, we all cook every day, lots of people smoke, lots of restaurants are there in every street, tea stall is there which uncountable, lots of vehicles are there on the road, etc. So what I mean to say is the risk of fire is everywhere. We are not sure about the next moment but we can minimize the losses.
The term ‘fire’ must satisfy two conditions:
- There must be actual fire or ignition
- The fire should be accidental
The property must be damaged or burnt by fire not by the heat or smoke without ignition.
Benefits of Fire Insurance
- Fire insurance covers Building, household items, household accessories, etc.
- Fire Insurance protects the neighborhood’s damages also if happened.
- Fire Insurance covers the expenses incurred for the reconstruction, replacement, and repair of the insured property
- This policy offers the price of possessions and properties alternatives, which get damaged or broken due to the fireplace incident.
- Alternative or maintenance for electronic items like television, computer, air coolers is also included in fire insurance coverage.
- It covers the price of share broken due to the fire
- Fire Insurance provides the medical expenses for the employees if they get injured due to the fireplace incident.
- 100% mental peace
Under a fire insurance policy the following circumstances are covered which caused by fire:
- Riot, Strike, Aircraft Damage
- Storm, Typhoon, Hurricane, Tornado, Flood
- Bush Fire
Types of Fire Insurance Policy in India
- Comprehensive policy: This is the best policy as this is ‘all in one’ policy. This policy covers any kind of uncertainty like fire, explosion, lightning, burglary, riots, labor disturbances, etc. This single policy covers multiple risks, thus, comprehensive insurance is highly recommended.
- Valued policy: This policy doesn’t work on the principle of indemnity. This policy is designed for a particular article or property which actual value can’t be decided after their damage or loss. The value of that subject matter is decided, upon which the insurer pays if it is destroyed or damaged. Usually, the antique items/paintings, handicraft items, jewelry, craft items, etc. come into this category. As per the agreement, the insurer will pay in the event of destruction of property by fire.
- Specific policy: Specific policy covers the loss up to a specific amount which is less than the real value of the property. The actual value of the property is not taken into consideration while determining the amount of indemnity.
- Floating policy: This is the best policy if you are in import and export business. This fire insurance policy provides coverage against the risk of goods lying at different places. But the goods should belong to the same person and a single policy with a single premium will cover all the risk of all these goods.
- Consequential loss policy: This policy is best for those who are in factory or production house. Due to a fire incident, factory works will be hampered and undoubtedly production will go down despite the fixed expenses continue at the same rate. With this policy, all these losses can be covered. This policy pays the policyholder for the loss of profit by calculating the compensation based on loss of sale.
Fire accidents are always unexpected but are heavily disparaging. Hence, having a fire insurance policy is very much essential. First, you analyze your risk and possible losses and then choose the best fire insurance policy. Now a day in India, all insurance providers are offering many insurance policies. You can choose that policy which is suitable for you. Opting an insurance policy is a wise decision.