Generally known as ‘Standard Fire and Special perils policy’ fire insurance is a form of protection against any unfortunate destruction or damage to property due to fire. Cover under the fire insurance policy can be extended to include other additional perils as detailed below.
Additional perils covered are loss or destruction due to Riot, strike and Malicious damage, Explosion, Strom, tempest flood, impact damage, Bursting and overflowing of tanks, terrorism, Aircraft damage, lightning, missile testing operations, loss of rent etc. Most of these form part of the policy and insurers may charge an additional premium for these covers.
The above FAQs have been designed in the
Indian context and may or may not be valid for
insured residing in other countries.
Housing buildings, hotels, factory buildings, stocks, commercial buildings etc.
The value represents the actual cost which would be incurred to replace/rebuild the insured property at the time of loss or damage to that property.
Sum Insured can be changed (either increased or decreased) by giving notice to the insurer and by payment of additional premium (incase of increase) or by getting a refund of premium (incase of decrease in sum insured).
Policy period is the time period during which the policy remains effective. Normally fire policies are issued for a year but shorter duration policies are also available. Longer duration (upto 5 years) policies are available for housing premises.
The proposer of the policy should first and foremost have a financial interest in the assets being proposed for Insurance, ie. he/she should stand to lose financially in the event of loss or damage to such assets.
Secondly, the proposer should submit a proposal
form (which can be obtained by any of Prescient
representatives/Office). The proposal form
should disclose all details, which are true to
the insured’s best knowledge and other
information, which the proposer may feel is
relevant. Any other details should be produced at the insurer’s request, wherever necessary.
Some of the factors which determine the cost of a fire insurance policy are: a) The insurers appetite for fire policy
b) Location of the property
c) Nature of the property insured (a chemical factory building will attract higher premium than a machinery tool manufacturing building)
d) The existing market rates. It is advisable that one take a quote from a broker as a broker is supposed to have pulse of the market at any point of time.
General exclusion include loss or destruction of the property due to War, Nuclear radiation, wear and tear, fermentation, volcanic eruptions, river erosion etc
If loss or damage occurs, it is the responsibility of the insured to act with reasonable care to minimize the loss where ever possible. In short, the insured should do everything in his capacity to minimise the loss as much as possible as in a situation where he/she would have acted if there were no insurance cover.
Secondly the local police should be informed and a police report should be obtained. The insurance company should also be informed as soon as possible regarding any loss that has occurred. Also your broker should be able to assist you incase of a claim.
Some of the benefits are: Adequacy of coverage: As a broker is a specialized firm having qualified personnel, insured can expect to be correctly guided by the broker.
Premiums: As the broker firm is independent, it deals with all the insurers and gets the best deal for the client.
Claim Assistance: Given the qualified pool of personnel in a broker firm, the insured can expect full assistance from the broker in settlement of a claim.