fire insurance

INTRODUCTION

Fire is one of the original perils insurance was designed to protect against. Current building codes and many nearby fire departments make it easy to forget about the catastrophic damage fire can do. However the damage caused by fire and the fire departments effort to put out a fire is all too real. It happens in just an instance. Smoker falling asleep in a chair, an unattended candle, paper or clothing too near the stove or a heat generating source, or a spark caused from an arching electrical source.
Fortunately, we have fire departments. The fire departments job is to put out the fire. This means water, lots of water and the pursuit of any potential fuel for a fire that results in destruction of property to ensure that the fire is put out. Most of the property hosed down by the fire department is not meant to be wet, therefore, it is damaged similar to what it would have been if it were burned.
Once the fire is out, how long will it take to build back the damaged property? An investment property that is not able to produce income is no good. How long can you last without the income from your property? To protect the income generated from investment property, Loss of Rents coverage is used. The coverage can be set up to respond in several ways from a monthly amount to the Actual Loss Sustained. Fire Insurance is governed by All India Fire Tariff effective from 31.3.2001 issued by Tariff Advisory Committee, a Statutory Body. It is a commercial policy covering building, offices, machinery, contents and personal belongings of the office. It mitigates the risk of loss of customers arising from fire breakout. The insured should take all possible steps to minimize the loss.

The market value of the property is considered while insuring the sum. The amount of premium depends on a number of factors and individual policies of different insurers.

Individuals/corporates must inform insurer as early as possible , in no case later than 24 hours.Provide relevant information to the surveyor/claim representative appointed by the insurer.The surveyor then analyzes the extent/ value of loss or damage.The claim process takes anywhere between one to three weeks.

INTRODUCTION TO FIRE INSURANCE

Definition of 'Fire Insurance'

Insurance that is used to cover damage to a property caused by fire. Fire insurance is a specialized form of insurance beyond property insurance, and is designed to cover the cost of replacement, reconstruction or repair beyond what is covered by the property insurance policy. Policies cover damage to the building itself, and may also cover damage to nearby structures, personal property and expenses associated with not being able to live in or use the property if it is damaged.

Homeowners and property owners may consider fire insurance in addition to a property insurance policy if the property contains valuable items. A best practice would be to document the property and its related contents, which makes identifying the value of items damaged or lost much easier after a fire has taken place. A fire insurance policy may contain exclusions based on the cause of the fire, such as not covering fires caused by wars.

The origins of fire insurance

The Great Fire of London, 1666 by Jan Griffier, the Elder
The Great Fire of London (1666) destroyed more than 13,000 houses and displaced about 100,000 people but it took a couple of decades for its embers to spark the first blaze of the fire insurance business. Nicholas Barbon was probably the first to recognize the potential of a fire-threat protection business, establishing the first fire insurance office near the Royal Exchange in 1681. The imaginatively named ‘The Insurance Office for Houses on the Backside of the Royal Exchange’ was a mutual scheme for house insurance, guaranteed by a property investment fund. The trust deed allowed Barbon’s firm to insure up to 10,000 houses. However, despite its charming name, it went out of business in around 1710. ‘The Friendly Society for Securing Houses from Loss by Fire’ faired somewhat better, entering the scene in 1683 and issuing 23,000 policies before its demise in 1730. It wasn’t until the launch of the Hand-in-Hand in 1696 that a fire insurance business with longevity took a firm foothold. This was followed by the Sun Fire Office in 1710, the Union in 1714, the Westminster in 1717, the London in 1720, and the Royal Exchange in 1720. Business was booming.
These early initiatives were of three types: mutual societies like the Hand-in-Hand and the Union; unincorporated companies like the Sun (effectively extended partnerships); and privileged chartered monopolies like the Royal Exchange. The latter two types were basically speculative enterprises, preserves of the wealthy and influential. According to insurance historian Trebilcock, they were motivated not by the fire-threat but rather by the potential for investment that they saw in the large capitals accruing from the fire premiums paid by customers. The mutuals on the other hand were humble cliques bent on risk-evasion - the classic associations of small traders and shopkeepers clubbing together for the defence of their property. Here, the customers for fire insurance were also the shareholders. However the chartered companies like the Royal Exchange were the only insurance ventures permitted to enjoy limited liability for shareholders under the terms of the Bubble Act of 1720: legislation designed to curb the speculation underlying the South Sea financial fiasco.

Tradecard for Sun Fire Office
Insurance records survive in varying forms of completeness. Perhaps the best examples of continuous policy registers are for the Sun Fire Office, founded as the Exchange House Fire Office in 1708 by Charles Povey, and renamed in 1710. There were 24 members of the Sun Fire who paid £20 each for interest in the company. By 1720 they had issued over 17,000 policies and claimed to insure sums totalling £10 million. By this time the Sun Fire had moved from its first quarters in Causey’s Coffee House near St.Paul’s to two rooms in a house belonging to Mrs. Alice Garway next door to the Amsterdam Tavern in Sweeting’s Rents. It would remain there until the threat of demolition encouraged a move to the New South Sea House on Threadneedle Street in around 1727.
Along with the other early fire offices, the Sun Fire was compelled to form its own fire brigade. The most suitable men for this work were the watermen from the Thames who were clad in the distinctive livery of their company. The following is an extract from the original proposal forms issued in 1710 and reprinted in a company pamphlet:
“For the farther encouragement of all persons there are actually employed in the service of the office thirty lusty able-body’d firemen who are cloath’d in blue liveries and having silver badges with the Sun mark upon their arms, and twenty able porters likewise, who are always ready to assist in quenching fires and removing goods having given bonds for their fidelity.”
It was the practice of each insurer to issue a badge or fire mark to be affixed to the building that was insured. The Sun Fire issued a mark with a rotund human face, surrounded by a halo of sixteen rays, 8 direct and 8 wavy. It was wrought in lead and painted a bright golden colour. The fire mark was to prevent fraud by obtaining an insurance policy by indirect means after a house had been burned. As the fire brigade would not service a house unless a mark was affixed, a property was not considered to be secure until the mark was in position. It also provided a handy bit of free advertising for the company.
The policy registers have proved to be valuable sources for economic, business and social historians. these records were the head office compilations of orders for insurance from all branches and agencies. The Sun Fire head-office registers form one un-indexed series up to the year 1793, containing 600,000 policies. From 1793 separate registers were maintained, again un-indexed, for London and the provinces. Over 1.3 million entries were made in these in the next 70 years. However, there are some missing volumes and a number of unreadable entries. They summarised relevant information about the building or contents underwritten on each policy. The information reproduced in the registers was geared to the rating of each risk and the control of the insurance premium. Consequently, most entries in the registers describe building materials, neighbouring properties, and occupational hazards associated with each insurance. The risks were classified according to the established formula of Common Insurance, Hazardous Insurance, and Doubly Hazardous Insurance. The first category covered brick and stone buildings not used for hazardous trades. The second covered timber and plaster buildings or brick and stone buildings housing hazardous trades. The final category covered timber and plaster buildings used for hazardous trades and all premises of sugar bakers, distillers, china and glass manufacturers and other dangerous trades. This classification system was generally followed until the late nineteenth century, although the Sun Fire added special categories for steam-powered mills and refineries after 1794. After 1825, a continuous stream of information about all classes of risk passed between the fire offices, ultimately culminating in the formation of a fire insurance tariff or cartel.
Almost all types of property were covered by fire insurance, the only exceptions being a few classes of industrial property considered far too hazardous for any premiums to be set. The Sun Fire had considerable business in domestic property of all sizes, including many of the major country houses and town mansions. It insured agricultural property, including both buildings and livestock, and a wide variety of industrial and commercial businesses from small workshops to the largest of breweries, textile mills and dock warehouses. When it carried out a review of its industrial risks in the 1820s it found that it had on its books property relating to such diverse trades as ‘gingerbread bakers, bedstead upholders, oar makers, tallow melters and chandlers, lamp-black manufacturers and brushmakers’. Likewise it insured all types of shops and offices, theatres, churches, cloth halls, town halls, inns and brewhouses, schools and libraries.
The policy registers hold a vast amount of information about these different properties and their contents. Details of owners, tenants, partners, executors and occupations and places of residence are frequently recorded. Property contents, including livestock, libraries of books, clothing and wearing apparel, business and industrial stock, and machinery are specified. Many policies contain physical details of buildings insured, including numbers of storeys and rooms, and construction materials. Uses of property are also recorded, as well as details of heating and lighting methods and means of power. There are also of course the valuations of property and their contents for insurance purposes. The few surviving certificates suggest that claims were for estimated cost of replacement or for clearance and rebuilding already completed, rather than current or historic value. Some offices also considered it better for the proposer to under insure and assume some of the risk themselves.
By the second half of the eighteenth century the major London companies increased the pace of their expansion into the provinces. Agents appointed by the companies were responsible for the ordering of new business, the collection of premiums, and the presentation of receipts to London. Agents came from many walks of life. The preference was for people with good local connections. They generally ran their agencies as a second line to their major occupation, usually some form of business activity. In the eighteenth century small traders and retailers, local clerks and other small local business people typically took on the role. In the nineteenth century a broader range of people became involved. Retailers, merchants, commission agents, teachers, surveyors of taxes, clerks in various professions including banks, estate agencies, railway and canal offices and so on were all recruited. Solicitors also took on agencies and constituted 25 per cent of all country agents for the Sun Fire Office in 1846. Women were occasionally recruited. In 1807 the Sun Fire grudgingly admitted that Mrs Buchanan, their Glasgow agent, was ‘very active and as attentive to the business as a female can possibly be expected to be’.

Fire insurance in India
Fire insurance business in India is governed by the All India Fire Tariff that lays down the terms of coverage, the premium rates and the conditions of the fire policy.[13] The fire insurance policy has been renamed as "Standard Fire and Special Perils Policy". The risks covered are as follows:
Dwellings, offices, shops, hospitals:
Industrial, manufacturing risks
Utilities located outside industrial/manufacturing risks
Machinery and accessories
Storage risks outside the compound of industrial risks
Tank farms/gas holders located outside the compound of industrial risks
Peri 2.1 COVERAGE SECTION A: Perils Specified
1 Fire
2 Excluding destruction or damage caused to the property insured by i. its own fermentation, natural heating or spontaneous combustion. ii. it's undergoing any heating or drying process. iii. burning of property insured by order of any Public Authority.
2.1.3 Lightning
2.1.4 Explosion/ Implosion
2.1.5 Excluding loss, destruction of or damage
a) to boilers (other than domestic boilers), economizers or other vessels, machinery or apparatus (in which steam is generated) or their contents resulting from their own explosion/implosion,
b) caused by centrifugal forces. 2.1.6 Aircraft Damage
2.1.7 Loss, destruction or damage caused by Aircraft, other aerial or space devices and articles dropped there from excluding those caused by pressure waves.
2.1.8 Riot, Strike and Malicious Damage
2.1.9 Loss of or visible physical damage or destruction by external violent means directly caused to the property insured but excluding those caused by a) total or partial cessation of work or the retardation or interruption or cessation of any process or operations or omissions of any kind.
b) permanent or temporary dispossession resulting from confiscation, commandeering, requisition or destruction by order of the Government or any lawfully constituted Authority.
c) permanent or temporary dispossession of any building or plant or unit of machinery resulting from the unlawful occupation by any person of such building or plant or unit or machinery or prevention of access to the same.
d) burglary, housebreaking, theft, larceny or any such attempt or any omission of any kind of any person (whether or not such act is committed in the course of a disturbance of public peace) in any malicious act.
If the Company alleges that the loss/damage is not caused by any malicious act, the burden of proving the contrary shall be upon the Insured.ls covered
:
Exclusions
The following are excluded from insurance coverage:
Loss or damage caused by war, civil war, and kindred perils
Loss or damage caused by nuclear activity
Loss or damage to the stocks in cold storage caused by change in temperature
Loss or damage due to over-running of electric and/or electronic machines
Claims In the event of a fire loss covered under the fire insurance policy, the insured shall immediately give notice thereof to the insurance company. Within 15 days of the occurrence of such loss the insured should submit a claim in writing giving the details of damages and their estimated values. Details of other insurances on the same property should also be declared.

Fire Insurance

Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance or boiler insurance. Property is insured in two main ways - open perils and named perils. Open perils cover all the causes of loss not specifically excluded in the policy. Common exclusions on open peril policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism and war. Named perils require the actual cause of loss to be listed in the policy for insurance to be provided. The more common named perils include such damage-causing events as fire, lightning, explosion and theft.

Fire insurance coverage
There are three types of insurance coverage. Replacement cost pays the cost of replacing your property regardless of depreciation or appreciation. Extended replacement cost will pay over the coverage limit if the costs for construction have increased. This generally will not exceed 25% of the limit. Actual Cash Value provides replacement minus depreciation. When you obtain an insurance policy, the coverage limit established is the maximum amount the insurance company will pay out in case of loss of property.[citation needed] This amount will need to fluctuate if homes in your neighborhood are rising; the amount needs to be in step with the actual value of your home. In case of a fire, household content replacement is tabulated as a percentage of the value of the home. In case of high value items, the insurance company may ask to specifically cover these items separate from the other household contents. One last coverage option is to have alternative living arrangements included in a policy.[citation needed] If a fire leaves your home uninhabitable, the policy can help pay for a hotel or other living arrangements.

Fire insurance in India
Fire insurance business in India is governed by the All India Fire Tariff [1] that lays down the terms of coverage, the premium rates and the conditions of the Fire Policy. The fire insurance policy has been renamed as Standard Fire and Special Perils Policy. Flood, inundation Impact damage Subsidence, landslide Bursting or overflowing of tanks Missile Testing Operations Bush fire etc.
Exclusions- Loss or damage caused by war, civil war and kindered perils
Loss or damage caused by nuclear activity
Loss or damage to the stocks in cold storage caused by change in temperature
Loss or damage due to over-running of electric and/ or electronic machines
Claims In the event of a fire loss covered under the fire insurance policy, the Insured shall immediately give notice there of to the insurance company. Within 15 days of the occurrence of such loss the Insured should submit a claim The risks covered are as follows:
Dwellings, Offices, Shops, Hospitals (Located outside the compounds of industrial/manufacturing risks) Industrial / Manufacturing Risks Utilities located outside industrial/manufacturing risks Machinery and Accessories Storage Risks outside the compound of industrial risks Tank farms / Gas holders located outside the compound of industrial risks
Perils Covered- Cause of Loss
Fire Lightning Explosion/Implosion Aircraft damage Riot, Strike Terrorism Storm, in writing giving the details of damages and their estimated values. Details of other insurances on the same property should also be declared.

A fire insurance is a contract under which the insurer in return for a consideration (premium) agrees to indemnify the insured for the financial loss which the latter may suffer due to destruction of or damage to property or goods, caused by fire, during a specified period. The contract specifies the maximum amount , agreed to by the parties at the time of the contract, which the insured can claim in case of loss. This amount is not , however , the measure of the loss. The loss can be ascertained only after the fire has occurred. The insurer is liable to make good the actual amount of loss not exceeding the maximum amount fixed under the policy.
A fire insurance policy cannot be assigned without the permission of the insurer because the insured must have insurable interest in the property at the time of contract as well as at the time of loss. The insurable interest in goods may arise out on account of (i) ownership, (ii) possession, or (iii) contract. A person with a limited interest in a property or goods may insure them to cover not only his own interest but also the interest of others in them. Under fire insurance, the following persons have insurable interest in the subject matter:-
Owner

Mortgagee

Pawnee

Pawn broker

Official receiver or assignee in insolvency proceedings

Warehouse keeper in the goods of customer

A person in lawful possession e.g. common carrier, wharfinger, commission agent.
The term 'fire' is used in its popular and literal sense and means a fire which has 'broken bounds'. 'Fire' which is used for domestic or manufacturing purposes is not fire as long as it is confined within usual limits. In the fire insurance policy, 'Fire' means the production of light and heat by combustion or burning. Thus, fire, must result from actual ignition and the resulting loss must be proximately caused by such ignition. The phrase 'loss or damage by fire' also includes the loss or damage caused by efforts to extinguish fire.
The types of losses covered by fire insurance are:-
Goods spoiled or property damaged by water used to extinguish the fire.

Pulling down of adjacent premises by the fire brigade in order to prevent the progress of flame.

Breakage of goods in the process of their removal from the building where fire is raging e.g. damage caused by throwing furniture out of window.

Wages paid to persons employed for extinguishing fire.
The types of losses not covered by a fire insurance policy are:- loss due to fire caused by earthquake, invasion, act of foreign enemy, hostilities or war, civil strife, riots, mutiny, martial law, military rising or rebellion or insurrection.

loss caused by subterranean (underground) fire.

loss caused by burning of property by order of any public authority.

loss by theft during or after the occurrence of fire.

loss or damage to property caused by its own fermentation or spontaneous combustion e.g. exploding of a bomb due to an inherent defect in it.

loss or damage by lightening or explosion is not covered unless these cause actual ignition which spread into fire.
A claim for loss by fire must satisfy the following conditions:-
The loss must be caused by actual fire or ignition and not just by high temperature.

The proximate cause of loss should be fire.

The loss or damage must relate to subject matter of policy.

The ignition must be either of the goods or of the premises where goods are kept.

The fire must be accidental, not intentional. If the fire is caused through a malicious or deliberate act of the insured or his agents, the insurer will not be liable for the loss.

Importance Of Fire Insurance
Fire insurance provides advantages to the enterprise in the following ways Fire insurance is the type of insurance coverage, in which an individual pays some sum of money to the company, in exchange to receive advantages for the fireplace losses.

Fire insurance provides the security for home, share, home furniture, enterprise buildings, etc,. Fireplace insurance provides the price of alternative of properties and assets, which gets broken due to the fireplace incident.

Fire insurance provides the advantages for the homeowner in these ways
It provides the price of damage for the building
It provides the arc, if any home furnishings are damaged due to the fireplace incident, like plywood home furniture, carpets, clothes.
It provides alternative or maintenance price for the electronic items,which is broken due to fireplace, like television, computer, air coolers.
It covers the price of share broken due to the fire
It provides the loss of life advantages to employee, in case of loss of life occurred due to the fireplace incident.
It provides the alternative or maintenance price for the machines, if they get broken due to fireplace incident.
It provides the medical expenses for the employees, if they get injured due to the fireplace incident.

Fire accidents are very much unexpected but are heavily destructive. Hence, having a fireplace insurance is very much essential.

The expectations of living have definitely modified with the times and this only indicates that more people look for any paths that can lead to benefits. With there being so many kinds of insurance available in the market, some select to leave fireplace insurance, stating that the threats of a fireplace developing are more distant, than say a enter. True, auto insurance, insurance all seem to take main concern, but that does not make fireplace insurance any less important.

Protecting property or home from fireplace is essential, more so if you know the chance of one developing is very real. Mature qualities usually bring more possibility with them. Their age predisposes them to have some substandard electrical wiring, or some leaking plumbing, which would all end up producing a fireplace. Modern, more latest qualities are at less possibility, but random shoots can happen, like during hefty stormy weather when super hits. A fireplace insurance coverage protects for the harm due to a fireplace in two ways. One is paying out the sum of money comparative to the value of the home or business, after the fireplace is out. The other is by getting together with the costs of changing the piece of property or home, and in this case, that indicates fixing and restocking.

It’s bad enough when your home uses up down due to some inevitable incident, but when you do not have an insurance plan to help you move back to your typical life, its even more intense. With that being said, it is well to consider the significance of a fireplace insurance plan, especially if you know you cannot manage to change the home in your own financial initiatives. You get a chance to explain the essentials of the insurance plan you want, showing what you want protected in the insurance plan, and what to be overlooked. If you cannot get your kind of insurance plan with one insurance provider, there are always so many others to select from.

Importance of Fire Insurance for Businesses
No type of risk is more dangerous than fireplace and arson that intends enterprise building in the U. s. Business. This is why high-risk enterprise qualities like dining establishments are recommended to take additional fireplace insurance to make sure they are well ready for such harmful activities.

Basically, fireplace insurance can provide complete take care of against fireplace and smoking damage to the property and its items. Since the actual features and price of take care of will differ on the level of take care of you used for, it is important to make sure that you are effectively protected. Thus, conditions and insurance plan information must be tested before carrying out to a fireplace insurance coverage.

Furthermore, there are other accessories that go with fireplace insurance that you have toinvolve in your take care of. Although they will price you a little bit more on charges, these will confirm to be important in the future. Such involve legal take care of, personal belongings, and old for new take care of. Just take be aware of administration accepted fireplace protection products that you can use, which will help bring down the price of your fireplace expenses.

FEATURES
Insure for the Proper Valuation
Many small business owners find that if they insure for an amount less than what the business is worth, premiums are lower. This is true. However, insurers require as a condition of the policy that the business is insured for a value equal to the actual value of the business. If it is not, and a loss occurs, a penalty is applied to the settlement amount. This penalty will almost always exceed the value of any saved premium and will come at a very bad time.
Always insure for 100% of the business value.
Have an independent evaluation of the business by an independent appraiser each year and adjust coverage as necessary.
Do not rely on property tax evaluations or guesses from your insurance professional.

Actual Cash Value Versus Replacement Cost
Most policies cover a fire loss with actual cash value or ACV instead of replacement cost. Actual cash value pays the amount of the property less depreciation. This can be devastating if your business relies upon high value equipment that has a long useful life, but would be prohibitively expensive to replace. As examples: coolers, refrigerators, tow lifts, aircraft or anything that would be prohibitively expensive to buy new. Replacement coverage pays the amount to replace the property lost at whatever the replacement cost is today. Replacement coverage carries higher premiums and can be purchased as a rider or endorsement. Consider the following when considering ACV vs. replacement coverage.
Your business may be underinsured if it cannot replace critical facilities and equipment at the depreciated value.
Electronics such as computers frequently decline in real replacement cost such that actual cash value may be a better option.
Property valuations are frequent causes of conflict between insurers and insured. You can avoid valuation problems by carrying replacement coverage.
Certain Property Needs Separate Coverage
Cash, valuable papers, certain types of inventory, some electronics, jewelry, and other items will require separate coverage or will be excluded from coverage. These are generally items that are impossible for the insurer to confirm and are prone to fraud.
Business Interruption Insurance
Fire insurance does not cover "downtime" for your business nor does it cover temporary relocation. Your business needs business interruption insurance to insure against the loss of revenue accompanying a fire and any potential relocation costs. Business interruption is a separate policy and should be considered if your business will be destroyed by being closed.
Coverage to Rebuild According to Current Building Code
Many businesses work in buildings or structures that are older than current building codes. In some cases, the structures are "grandfathered" in and do not have to comply with current modern standards. When a fire occurs the new construction must meet those standards. To the extent the insurer holds that such new standards are an improvement on the past structure, there is no coverage. If you have a historic building or do business in a rapidly changing area, you will want to make sure you have coverage to rebuild according to current building codes. This is often a separate endorsement or rider to the policy.

Advantages of Fire Insurance

There are many benefits of purchasing the fire insurance policy. In present scenario, many people are looking for luxurious lifestyle and leading a life full of gadgets. This has substantially increased the risk of facing crisis situations. In such circumstances, one should get his house and commodities secured and insured. The Standard Fire and Special Perils Policy provides coverage against potential perils to keep the business, property, home , offices , etc.; insured.
If one does not get his house or business insured then in event of fire, one can get emotionally and financially breakdown. It is very essential to get the fire insurance done for your all property, possessions and goods. Imagine a situation where your savings are invested in a house which gets burnt in fire. In majority of the situations, people do not have enough money to make replacements.
As per law, every house is covered by fire insurance of certain amount and one is required to ensure that the property and house are sufficiently covered in the policy plan. Many businesses can’t operate without insurance cover.

Benefits
ReplaceContents: With fire insurance policy, insured person can get the replacement of a certain value of household and business contents.
Temporary Accommodation: In the event of fire, the property and house might get burnt badly and it will take time to get the repairs done. In such circumstances, fire insurance provides financial protection from the loss of home & business and possessions. Insured person also gets the expenses for temporary accommodation which enables them to move out and live somewhere else for temporary time period. These expenses are covered by the insurance policies.
Rebuild the Damage: Fire can lead heavy damage to buildings and cause big losses to the business and home structure. This policy provides coverage for rebuilding or replacingthe damaged sections. While purchasing the policy, one should ensure that everything including garage, swimming pool and other structures are sufficiently covered.
Preventative Measures: By installing the various fire resistant and fire preventive devices, one can significantly reduce the cost of policy. It includes the usage of fire alarms, sprinkler systems, and other safety measures.
Third party fire and theft car insurance This coverage policy offers protection in the event of car catches fire, gets stolen, or cause damage to someone else’s property. This coverage is available with car and fire coverage or third party car insurance.
Protection for wooden structures: In case your house or other property structures are made from wood then fire insurance policy offers you the coverage for your property in the event of fire when it might get burnt completely.
Financial Security: Fire insurance policy offers coverage against the loss of your property and goods. It will offer financial security in the event of fire causing damage to your property and house.

Fire Insurance Policy
Bhubneshwar Ombudsman CentreCase No. 11-012-0315 M/S ParibartanVs ICICI Lombard General Insurance Co. Ltd. Award Dated : 30.10.2007Insured Complainant proprietor of a cloth shop insured his stocks under standard fire and special peril policy with ICICI Lombard General Insurance Co. Ltd for sum insured of Rs 2600,000/. During currency of policy insured shop was gutted by fire due to electrical short circuit. Insurer appointed surveyor has assessed the loss for an amount of Rs 746583/ on the basis of physical verification in absence of purchase and sales bills. Insurer repudiated the claim as purchase bills submitted by insured were false and fabricated and fake. Insured being dissatisfied with the decision of insurer preferred this complaint. During Hearing insurer stated that bills submitted by insured were fake.
Insured stated that he had also insured the same stocks with United India Insurance Co.Ltd for an amount of Rs 95,00,000/ . United India has settled the loss for an amount of Rs 116,847/ on 22-10-2006. Some of bills were fake and was arranged for settlement of the claim as advised by surveyor. Hon’ble Ombudsman directed the insurer to pay Rs 536793/ as insurer has neither submitted the survey report as promised to this forum nor produce the evidence regarding the fake bills. Bhubneshwar Ombudsman CentreCase No.11-005-0198 Syed Akbar Vs Oriental Insurance Co. Ltd. Award Dated : 17.03.2008Insured Complainant obtained a shop keeper’s insurance policy to cover the stocks of his auto spare parts shop with Oriental Insurance Co. Ltd for a period of one year commencing from 7-12-2004. .Insured’s shop was damaged by fire and stocks worth of Rs 101,889/ were damaged. . Insurer appointed surveyor has assessed the loss for an amount of Rs 45,000/. Insurer settled the claim for an amount of 30339/ by not considering the losses on fibre, plastic and paper items. Insured complainant being aggrieved of the decision of insurer approached this forum. Insurer filed the Self Contained Note stating that as per survey report the claim has been settled for Rs 45,000/.Insurer has not considered the cost of plastic, fibre and paper items as same were not covered under the policy. During hearing complainant stated his entire shop was completely destroyed by fire and insurer offering Rs 33,399/. Against sum insured of Rs 80,000/. Plastic,fibre and paper items were very much covered under the policy. Insurer representative re iterated their stand taken in self contained note. Hon’ble Ombudsman directed the insurer to pay Rs 45,000/ to the complainant as the parts like jumper plate, packing kit, broke shoe liner, Speedo meter cable ,mud guard are auto spare parts and insurer has arbitrarily deducted the cost of these parts. Bhubneshwar Ombudsman CentreCase No.11-005-0196 Sri P. Sujit Kumar PrustyVs Oriental Insurance Co. Ltd. Award Dated : 24.03.2008Insured Complainant obtained a Shop Keeper’s Insurance Policy from Oriental
Insurance co. Ltd covering the stocks in trade of his stationery shop for sum insured of Rs 50,000/. During the currency of the policy stocks of insured shop was damaged by fire. Insured lodge a claim of Rs 56,000/ where as surveyor appointed by insurer assessed the loss for Rs 29,870/. Insurer settled the claim on non standard basis for an amount of Rs 14302/ as insured was not maintaining the books of accounts. . Insured complainant being aggrieved of the decision of insurer approached this forum.
Insurer filed the Self Contained Note stating that the surveyor has assessed the loss for Rs 49,000/. After application of policy excess ,under insurance and salvage the surveyor has recommended for Rs 29807/. Insurer again settled the claim on non standard basis for an amount of Rs 22401/. During hearing Insurer’s representative re iterated their stand taken in self contained note Insured complainant stated that entire shop was destroyed by fire and insurer offered only Rs 14302/ against sum insured of Rs 50,000/. Honourable Ombudsman directed the insurer to pay Rs 36,260/. As the calculation made by surveyor isnotconvincing and non standard settlement of claim by insurer is not acceptable as surveyor has taken Into consideration of bank statement declared by insured. Chandigarh Ombudsman Centre CaseNo. : GIC/434/NIC/14/08 ShadiLalBhatVs National Insurance Co. Ltd. Award Dated : 05.03.08

FACTS :
ShriShadiLalBhat got his house covered under Fire Policy for sum insured of Rs. 7 lakhs for the period 17.1.04 to 16.1.05. His house was gutted and ransacked in January’05. The insurer deputed M/s Hari Om Engineers who after collecting all the requisite documents assessed the loss at Rs.3,22,000/-. He was shocked to receive an approval on 28.9.07 of Rs. 72,465/- without giving any justification for reduction in the assessed amount. Parties were called for hearing on 5.3.08.

FINDINGS :
The insurer vide letter dated 1.1.08 submitted that the complainant’s residential building at Kulgam, Anantnag was insured after a pre-risk inspection of the property which was arranged through surveyors.. The report revealed that the premises was already burgled and all wooden joinery items had been stolen whilst it remained uninhabited from 1989 onwards. The insured preferred a claim in Jan’05 intimating that his house had been set ablaze by some unknown miscreants. M/s Hariom Engineers who were deputed for survey, assessed the loss at Rs. 97,525/-. After deducting excess of Rs. 25,000/- as per policy terms, the claim was payable for Rs. 72525/-.

DECISION :
Held that after going through the pre-risk survey report carefully, it shows that there were no doors and windows at the time of pre-risk survey. However in the survey report prepared by the surveyor after the fire, damages other than fire are mentioned some of which are not reportedly covered in the pre-survey inspection report. These damages could be due to burglary as mentioned by the police in their police report. Although the theft and burglary per se is an exclusion under the terms and conditions of the policy, I am of the opinion, after taking a fair and just view, that the burglary took place because the person was not staying in the house due to difficulties of re-locating himself in that place. Therefore it is my opinion that 50% claim payment on ex-gratia for the amount admissible under non-fire damages, excluding the amount assessed for doors and windows, would be a just and fair compensation to the complainant in addition to the claim amount already approved under fire damages.

TYPES OF FIRE INSURANCE POLICIES

Fire insurance provides coverage for the loss of your property caused by fire. Usually, a policy has four areas of coverage: the dwelling, other structures like a detached garage, gazebo, or a guest house, personal property, and the loss of use or additional living expenses in case if you have to move out and live somewhere else until your property is rebuilt or repaired. However, depending on the type of property and the needs of the insured, there is no standard one-size-fits-all policy. In fact, there are several different types of fire insurance policies that vary based on the area of coverage.
Here are the main types of fire insurance policies:
Specific policy
In a specific policy the insurance company agrees to pay a specific amount regardless of the value of the property. The indemnity is usually lower that the actual property value. Sometimes, but not always, the policy may include “the average clause,” which states that the insured is required to be partially responsible for the loss. In that case, the policy is called an average policy.
Comprehensive policy
This type of fire policy covers all kinds of risks like fire, burglary, theft, riots, and other third party risks. That’s why it is often called “all-in-one policy.” If you are insuring your business, the policy may cover the loss of profits for as long as the business remains closed due to fire damage.
Valued policy
A valued policy is not based on the principle of indemnity. Instead, in this policy the indemnity is a fixed amount agreed upon at the time of signing the contract. The insurance company pays that amount regardless of the actual loss due to fire. The valued insurance policy is usually offered for such items like jewelry, furs, or paintings, which value is difficult to estimate once they are damaged or destroyed by fire.
Valuable policy
As opposed to the valued policy, in a valuable policy the indemnity is determined depending on the actual loss of the property and at the time that loss occurred. It is usually calculated based on market value of the property.
Floating policy
A floating policy is considered in case of multiple properties that belong to the same policyholder. It is often purchased by businesses that own more than one warehouse or store where inventory changes frequently and their merchandise and/or raw materials are at different locations.
Replacement policy
A replacement policy, also called reinstatement policy, binds the insurer to pay for replacing the damaged property. The insurance company reinstates the property instead of paying out cash.
Fire insurance policies vary depending on the area of coverage. However, not everything might be included in a general policy. There are some exclusions like for example medical bills, loss of human life or pets, damage to the landscape, etc. that may require an extended coverage to be purchased.
20 FIRE INSURANCE CLAIM TIPS

1.Contact your insurance company to report the claim as soon as possible to notify them of the type of loss you’ve suffered. In fact, they may require you to contact them within a certain amount of time after a loss has occurred. Your policy will detail this information, including whether that notification must be in writing. The following is a list of information to include in your claim. Date of loss Type of loss or damage Location of damage
Any related injuries Others involved Condition of the home Description of damaged contents Whether or not temporary repairs are necessary A police/fire report
2. Make a written request to your insurance carrier for an advance on your fire insurance claim to get living essentials you need for shelter, clothing, food, travel, etc. (this amount will be deducted from the total you receive from your insurance claim).
3. Find temporary housing.
4. Secure your property – if only a part of your property was damaged then you need to mitigate damages.
5. Businesses that have business interruption coverage should prepare books and records.
6. Review your policy for coverage to determine how much and what type of coverage you have, what is covered, what is excluded and determine how your claim must be filed and any deadlines that might apply. Much of this information can be found on the declaration’s page of the policy which is usually located at the very beginning of the policy. If you can’t locate your policy, contact your broker or insurance company immediately to obtain a copy.
7. Photograph and/or video damage
8. Make a list of all the items you lost.
9. Get repair/replacement estimates.
10. Gather and keep all receipts for your temporary living expenses.
11. Continue paying your insurance premiums and mortgage
12. Smoke damage is a covered peril in most homeowners policies. Your insurance company will most likely pay for cleaning smoke and ash, but disputes often arise over cleaning versus replacing items that have been exposed to smoke.
13. If you or a resident of your home has health sensitivities such as allergies or asthma, alert your adjuster right away. Mold and soot inside your home, if not eliminated, can irritate people with respiratory problems. After a partial loss, you can (and should) seek payment from your insurer for mold, smoke, soot and odor mitigation.
Your adjuster may tell you that it is sufficient for you to wipe surfaces yourself, and that a deep cleaning is not necessary. The cleaning/drying process can be expensive when it’s done right, so insurance companies have developed ways to control their payouts for this work. You must stand firm and reject shortcuts and improper cleaning.
It is also very important to have the entire HVAC system of your home cleaned out. You can access some parts of the system and clean by hand, but a professional should do the rest.
14. Thoroughly inspect the following areas:
- Roof: Your roof should be inspected for damage from burning embers. If heat was extreme, the roof structure may be compromised. Wood under the roofing material may be water stained and moldy. A roofing expert can verify damage.
-Structural Steel, Iron: Steel and iron structures may transfer heat and destabilize a foundation or retaining wall.
-Stucco, Siding and Concrete: Stucco may spall and crack due to dehydration and baking. Siding may melt after exposure to heat and mold may be present underneath. Heat may also damage an anchored foundation or footing and may require testing as well as concrete core sampling. Structural engineers may do x-ray testing and other miscellaneous forensic work.
-Windows: Window frames may melt, blister or discolor due to heat. Glass can experience warping and discoloration and may lose some of its transparent clarity. Warped windows can lead to moisture problems and/or a mold problem.
-Plumbing and Heating Systems: Pipes, solder/connectors and ducts should be checked for damage.
-Interior Walls/Framing: A contractor conducting a thorough inspection of your home’s interiormay need to open up walls to check for damage to the framing, or to uncover potentially dangerous mold. It’s better to uncover damage sooner rather than later. Be politely assertive in claim negotiations to make sure your home is restored to a “uniform and consistent” appearance as opposed to a “patchwork quilt” of unmatched new and old materials. Read more information below about “matching.”
15. Fires that damage but do not completely destroy a home create special insurance claim issues. These claims are often called “partial losses” because the home has only been partially destroyed. Things to watch out for with partial losses include:
• Hidden damage (water, smoke, ash, mold, air quality, ducts)
• Inadequate or improper cleaning and repair methods
• Delays: Particularly after disasters, partial losses can be low priority for overworked insurance adjusters
• Disputes over “matching” and line of sight: Repairs should return your property to a “uniform and consistent appearance” even if that means replacing undamaged items such as roof tiles or carpeting.
16. What your insurance company should do. Once you’ve notified your insurance company of your loss and provided the information needed to start the claim, your insurer will generally assign the case to a claims representative who will analyze your policy to determine what type of policy you have, your policy limits, what is covered, what is excluded, your deductibles and any other information that might be needed.
17. Payment process. Payment processes will differ depending on the type of loss you have. For a small loss, your insurer may simply write you a check. For a larger loss, your insurer may advance some of the costs needed to rebuild or repair your home throughout the process. It’s important to ask your claims adjuster how the payment process will occur in your situation, and more importantly, to get that in writing.
18. Time line. While the time line for every claim differs depending on the nature of the claim, most claims can generally be completed within a few months. In extreme cases, the process could take several months. It’s important to keep in close contact with your claims representative to make sure that your claim doesn’t fall through the cracks and that you’ll be able to get back into your home as soon as possible.
19. Replacement Cost Value (RCV) vs. Actual Cash Value (ACV) – the difference between the two comes down to one word called depreciation. RCV policies, typically give you replacement cash value. If you have an ACV policy, depreciation is deducted from age of building components ie. Roofs, siding, gutters, HVAC, etc. as they older they get they are deteriorating from age and thus lose value a.k.a. depreciate.and you get the actual cash value when the claim is settled.
20. Consider hiring a public adjuster – This is a licensed insurance claims adjuster who works exclusively to represent the policyholder’s interests, YOU…NOT the insurance company. Public Adjusters negotiate with the insurance company for you and are compensated on the gross recovery of the claim settlement. Some people fear doing this because of the extra cost—you typically pay a public adjuster ten percent of what the insurance company ultimately pays you. This can be worth it, though, if the adjuster succeeds in getting you significantly more than you would have otherwise received.
In any property loss situation, there are basic steps to follow to make the insurance recovery process go more smoothly. Document everything that was damaged or destroyed, file a timely claim, learn and assert your rights to full and fair payment, and get help if and when you need it.

RULES AND REGULATIONS OF FIRE INSURANCE
Fire insurance contract may be defined as "an agreement, whereby one party in return for a consideration undertakes to indemnify the other party against financial loss which the latter may sustain by reason of certain defined subject-matter being damaged or destroyed by fire or other defined perils up to an agreed amount."
The party responsible to indemnify the loss is called the insurer, the party who is to be indemnified is called the insured, the consideration for the contract is termed 'the premium', the defined subject-matter is termed 'the property insured" the sum set forth in the contract is called the assured sum, and the document containing the terms and conditions of the contract is known as 'the policy.
The contract of insurance involves all the elements of an ordinary contract and insurance contracts. The elements of contract are discussed in following paragraphs.
Before discussing the elements of the fire insurance contract, the special meaning of the 'Fire' must be understood.
Fire:
Fire, in order to make the insurer liable under the contract, must satisfy two conditions. First, there should be actual fire or ignition, and second, the fire must be for tuitions in its nature.
Ignition:
The expression in the policy we have to construct is loss or damage occasioned by fire. This means that loss or damage must be either by ignition of the article or property or premises or part thereof. In other words, the damage should be occasioned by fire.
Loss or damage caused by excessive fire heat cannot be included in 'loss or damage by fire'. If should be proved here, that the loss should be caused by fire.
The cause of fire is not important. The fire even if caused by the negligence of the servant or himself may come under the definition of fire. There should be no fraud or willful misconduct by the assured. There should be actual ignition but a process resembling fire may not be fire.
For example, the damage done due to smoke due to faulting chimney, or overheated iron are not the example of fire. Similarly chemical actions, explosion, lighting, etc. are not occasioned or example of fire.
Fire should be accidental and not intentional:
Any loss caused by fire lighted purposively is not a loss by fire if it was intentional. However, the property burned accidentally in an ordinary fire, such as domestic fire, the loss is covered even if the fire remains under control.
When a fire was purposively lighted but became out of control at a later stage is taken under the definition of fire. The object of fire insurance is to indemnify the insured against accidental loss by fire.
Elements of Fire Insurance Contract:
1. Features of General Contract:
All the features of general contract are also applicable to the fire insurance contract. Such as proposal and acceptance, consideration, agreement between the parties, legal competence of the parties and legal venture.
(a) Proposal:
The proposal for fire insurance can be made either verbally or in writing. The proposer gives the necessary description of the property to be insured.
In practice the printed proposal form is used for the purpose. Introduction, type of properties, value of properties, construction, occupation, etc., are the various information which is required by the insurer. The answers to these questions must be completely correct.
The assured must disclose all the material facts and should observe utmost good faith. The description of the subject-matter of insurance is the basis of contract for assessing the risk and fixing the premium.
(b) Acceptance:
On receipt of the proposal form, the insurer will assess the risk. Sometimes, when the contents and subject-matters are not of very high amount, the insurer may accept on the basis of proposal forms only.
When the subject-matters is of larger magnitude and where the hazard involved is of a variable or unknown nature, the insurer may send his surveyor to survey the property.
The surveyors being expert in the field of insurance evaluation will consider the proposal in the light of this report. The unknown proposers are required to submit an evidence of respectability.
The insured is required to submit a certificate from some known and respectable person about honesty and integrity. As soon as the proposal is accepted, the assured is informed about the decision.
(c) Commencement of risk:
The risk commences as soon as the contract is completed provided there is no specific time for the purpose. As soon as the proposal is accepted, risk will commence irrespective of the fact that no policy was issued and no premium was paid.
Where risks are unknown and tremendous, the payment of premium will be the basis of the completion of the contract.
The risk will commence only when the premium has been paid and not before that when the policy has been issued, payment of premium will not be the basis of commencement of risk.
(d) Cover note:
The insurer issues a 'Cover Note' or 'Interim Protection Note' when the risk was accepted provisionally or subject to the condition of payment of premium. This note will cover the property so far the final policy has not been issued. If loss occurs before issue of policy the cover note will be sufficient to prove insurance. The cover note however is not taken at par to the policy.
Policy:
The insurer issues a duly stamped policy which will bear all the terms and conditions of the contract. Any contract of fire insurance comes within the meaning of the word 'policy'. It is a statutory and formal document of insurance contract. There are different forms of policies for different types of policies. However, a standard form is also used.
The policy contains the name and address of the insured, the subject-matter of insurance, the sum insured, the term and the premium. There are various clauses governing the conditions of insurance contract. The terms and conditions of the policy can be changed.
Period of Fire Insurance Policies :
Usually fire policies are issued for one year and are called 'Annual Insurance.' Policies issued for a period shorter than one year are known as 'Short-term Policies' and those issued for a period more than one year are called 'Long-term Polices'. But in practice only annual policies are common.
'Short- term' and 'Long-term' policies are rarely used. Long-term policies are generally issued in case of building. Alteration in the policy will be made according to the change in building and terms of insurance. The premium rate is determined according to the nature, location, construction of the property.
Moreover, the period of insurance is also taken into account for computing premiums More than one fire during a Period
When there is more than one fire in respect of the same subject-matter insured, the insurer is not bound to pay more than the sum assured. During the policy-life, payment of each loss, automatically, reduces the amount of the policy by the amount so paid.
When, after payment of certain losses, the property insured is totally destroyed, the insurer will pay loss not more than the balance of insured amount remaining after compensation of the previous losses.
However, if the insured is willing to get payment of full loss, he can reinstate the assured sum to the original amount by paying afresh premium on a pro-rata basis to the date of expiry.
More than one Policy :
If the same subject-matter is insured with more than one insurer, he cannot realize more than the actual loss from all the insurers. Each insurer will pay his ratable proportion of loss to the property insured against fire. If there is average clause, then the insurers will pay accordingly.
2. Insurable interest:
Insurable interest is the general principle of insurance without which insurance cannot lawfully be enforced for an insurance unsupported by an insurable interest would be a gambling transaction.
Insurable interest will be there where the subject-matter should be in such a position that the insured may suffer loss at the time of damage and may gain by its protection.
The insurable interest in fire insurance must be present at the time of contract continue throughout its currency and at the time of loss.
Insurance contract will be invalid if the property is sold to another party. Similarly if there is no insurable interest at the time of insurance, the contract will be invalid. The following conditions must be fulfilled to constitute an insurable interest.
(i) There should be a physical object capable of being damaged or destroyed by fire.
(ii) The object must be the subject matter of insurance.
(iii) The insured must stand in such relationship as recognized by law where the insured is benefited by the safety of the subject-matter or be prejudiced by its loss. The insurable interest is the 'pecuniary interest'.
The fire insurance is a personal contract between the insured and the insurer. So, the transfer of interest would invalidate the contract. The following persons have insurable interest in the subject-matter concerned.
1. The owner of the property or asset whether fixed or current has as insurable interest whether he is the legal owner or the equitable owner. The owner may be a single or joint, holder. 'Partial owner can take policy for full value as trustee of all the property. A Life tenant entitled to the use of the property during his life time only has an insurable interest.
2. An agent has insurable interest in the property of his principal.
3. A partner has an equitable interest in the firm's property.
4. A creditor has an insurable interest in property on which he has a lien for the debt.
5. An insurer has it in respect of risks underwritten by him for the purpose of reinsurance.
6. Where the subject-matter is mortgaged, the mortgagor has an insurable interest in the full value thereof and the mortgagee has an insurable interest in respect of any sum due to become due under the mortgage.
7. A bailed can insure any article or property bailed. He may be a gratuitous bailed or bailed for reward.
8. A trustee has insurable interest in the property put on trusteeship.
3. Principle of Good Faith:
The contract of fire insurance is one in which the observance the utmost good faith-uberrima fides-by both the parties are of vital significant. The utmost good faith in fire insurance has two aspects-first, disclosure of material facts and second, preservation of the property insured.
The insurer and the insured must furnish detailed information regarding the subject-matter to be insured. The insured, since he has more, information about the subject-matter, must disclose all the information asked truly and fully.
The, assured is also required to disclose all the material information which are known to him although it was not asked by the insurer; material fact is one which influences the decisions of the insurance. The decision may be pertaining to the acceptance or declination or determination of the premium.
In case of fire insurance the examples of material facts are construction of buildings. If the assured has not observed good faith, the contract can be avoided by other party. It was immaterial to plead that the insured was unaware of the fact and could not disclose.
In a given circumstance, it is expected from the insured to-know all the material facts. The insurer has also to disclose such material facts as are within his knowledge.
The second phase of good faith is preservation of property. Thus, the observance of good faith is necessary not only during the negotiations of the contract but throughout the term of the policy and in making claims.
Any change after commencement of risk must be communicated to the insurer. The insured or his agents as well as the insurer must take all such steps as may be reasonable for averting or minimising loss.
Since the insured is near to the property, he must act to prevent the fire and if fire occurred, he must do his utmost to extinguish it. In such cases he must act as if he was not insured.
Exceptions :
In the following circumstances, the insured is not required to disclose information.
1. All those circumstances which diminish the risk.
2. All those facts which are known or reasonably presumed to be known to the insurer.
3. Information which are of common knowledge.
4. Those facts which the insurer in the ordinary course of his business ought to know or which the insurer ought reasonably to have inferred from the details given.
5. Those facts which are superfluous to disclose by reason of a condition or warranty.
4. Principle of indemnity:
The doctrine of indemnity aims to compensate the insured for a loss sustained, and the compensation should be such as to place him as nearly as possible in the same pecuniary position after the loss as he occupied immediately before the occurrence. The insured cannot claim anything in excess of the amount required to recoup the actual loss sustained.
The insurers undertake to make good the insured's loss by monetary payment or by reinstatement or replacement so that the insured shall be fully indemnified, but this is subject to the sum insured.
The law does not sanction any insurance which would enable the insured to profit by the destruction of the thing destroyed. It will check the temptation to destroy the property insured thereby to secure the money.
The assured amount is not the measure of indemnity but it sets an upper limit up to which the loss can be indemnified. The actual amount of indemnity will be the market value of the subject- matter destroyed or damaged by fire at the time and place of the occurrence of fire. It will never exceed the assured amount.
When the actual loss is more than the assured amount then only the insured sum will be paid and nothing more is paid. But, this principle does not hold well when the policy is valued policy.
Here, the basis of indemnity will not be the actual cash value of the property at the time of loss but the insured value which is named in the policy when it was taken. In a valued policy, no consideration is given to the actual loss.
Thus, the amount of claim may be greater or less than the actual loss at the time of fire in case of valued policies.
Interpretation of Indemnity :
The insured is entitled to perfect indemnity subject to the sum assured being sufficient. But, in practice such perfection may be difficult to attain. Previously, the meaning of the word 'indemnity' was understood in the sense of material indemnity only, i.e., tangible and material property only. The intangible loss, i.e., loss of profit, rent, etc. was not compensated.
It worked as a great hardship to the honest insured persons. Now, the insurance is extended to cover not only the material loss of property insured but also to cover the 'consequential loss'.
When a business property is burnt, not only the material loss on account of the destruction of building, plant and stock are covered but the consequential loss of profits on account of cessation of sales, salaries, taxes, rent, rates, etc., are also indemnified.
Now a day's tangible and intangible losses are insured and the consequential loss is also within the meaning of indemnity.

Fire Insurance: How Does It Work?
Q: If I have a house fire, what should I do?
A: Contact your insurance agent immediately after calling the fire department for help. Get the name of the person that you talk to, the claim number, and the adjuster's name, and find out when the adjuster will contact you. If you get a recording, make a note of the day and time that you left a message.
Q: What should I do after I’ve notified the insurance company and before the adjuster arrives?
A: Secure your property if firefighters have already finished their work. A fire contractor (sometimes referred to as a “fire chaser”) may appear on the scene, even while the firefighters are still present, and offer to temporarily board up your house. The fire contractor also may try to get you to hire him/her to do the actual dwelling repair. Before you commit to having any work done by the fire contractor, ask if the contractor is bonded and whether the contractor will agree to accept the reasonable value placed on his/her services by the insurance company. Do not sign any agreement with any contractor to do the actual dwelling repairs until after you have consulted with the insurance company.
Q: What will happen when the insurance adjuster arrives?
A: An insurance adjuster is responsible for assessing the damage to your home for the insurance company. The adjuster may take a recorded statement from you, give you an advance so you can buy new clothes, set you up in a rental unit if your house is unlivable, and generally explain the claim process. Ask the adjuster for a complete copy of your insurance policy if you do not have one since the policy sets out “the rules of the game.” Also ask for a copy of your recorded statement and a written list from the adjuster of what steps you need to take to move the claim forward.
Q: What does my homeowner’s insurance policy cover?
A: All homeowner policies cover loss by fire and most common perils such as windstorm, hail, and vandalism. Most policies pay for three types of damage: 1) dwelling loss (damage to the house); 2) personal property loss (damage to your household contents); and 3) additional living expenses (the cost of living elsewhere while your home is being repaired).
Q: How does the insurance company measure my loss?
A: Most homeowner policies are written on a replacement cost basis, which means that the loss is measured by the amount of money it takes to repair the house or replace the damaged personal property with new items. Some policies are written on an actual cash value basis, which means that the insurance company pays the depreciated value of the damaged item rather than its replacement cost. However, even most replacement cost policies only pay the actual cash value of the loss until the property is repaired or replaced.
Q: Who determines the amount of my loss?
A: Most insurance companies will prepare a dwelling repair estimate and then provide it to you to forward to a contractor of your choice. The contractor may write his/her own estimate and negotiate with the insurance company for more money. Some insurance companies have their own lists of preferred contractors, and will guarantee their work.

Most companies require you (the insured) to prepare your own personal property inventory, and will not provide any assistance other than giving you blank forms to complete. You can complete the forms yourself, but it is a lengthy and time-consuming process. For an extensive fire loss, it may be worthwhile to hire a professional appraiser or a public adjuster. Some insurance companies will prepare a list of the damaged personal property for you, and assign replacement costs and actual cash values to each item. You may challenge these figures if you believe that they are too low.
Q: What is a public adjuster?
A: Public adjusters are specially trained professionals who are licensed by the state. They represent policyholders only, as opposed to the insurance company adjusters who work only for the insurance company. Public adjusters are trained to prepare dwelling damage repair estimates and to value damaged personal property. They are generally knowledgeable about the coverages provided by a typical insurance policy, although they cannot offer legal advice. They generally work on a contingent fee basis, that is, for a percentage of the amount recovered.

Q: What if I do not agree with the insurance company's valuation of my damages?
A: Most homeowner insurance policies contain a provision that allows an insured to challenge the insurance company's assessment of the amount of the loss through an informal process known as appraisal rather than through the filing of a lawsuit. Appraisal is generally cheaper and faster than a lawsuit, so it is a good option for most policyholders.
FIRE INSURANCE

Fire insurance is a contract to indemnify the insured for destruction of or damage to property or goods, caused by fire, during a specified period. The contract specifies the maximum amount, agreed to by the parties at the time of the contract, which the insured can claim in case of loss. This amount is not, however, the measure of the loss. The loss can be ascertained only after the fire has occurred. The insurer is liable to make good the actual amount of loss not exceeding the maximum amount fixed under the policy. CAUSA PROXIMA It is a rule of law that in actions on fire policies, full regard must be had to the causa proxima. If the proximate cause of the loss is fire, the loss is recoverable. If the cause is not fire but some other cause remotely connected with fire, it is not recoverable, unless specifically provided for. Fire risks do not cover damage by explosion, unless the explosion causes actual ignition, which spreads into fire. The cause of the fire is immaterial, unless it was the deliberate act of the insured. STEPS TO BE TAKEN IN FIRE INSURANCE CLAIMS
1. It is the duty of the insured, or any other person on his behalf, to give immediate notice of fire to the insurance company so that they can safeguard their interest, such as, deal with the salvage, judge the cause and nature of fire and assess the extent of loss caused by the fire.
2. Failure to give notice may avoid the policy altogether.
3. The insured is further required by the terms of the policy, to furnish within the specified time, full particulars of the extent of loss or damage, proof of the value of the property and if it is completely destroyed, proof of its existence.
4. Delivery of all these details to the company is a condition precedent to the claim of the assured to recover the loss. If the assured prefers a fraudulent claim, whether for whole or part of the policy, he would forfeit all benefits under the policy, whether or not there is a condition to this effect in the policy. Generally, the fraud consists in over -valuation, but over-valuation due to mistake is not fraudulent. In a majority of fire insurance claims, the expert assessors of the company are able to arrive at mutually acceptable valuation.

Pros of fire insurance: the advantages are given below-

1. Fire insurance is very helpful at times when your house burns down and you are helpless in stopping it. But, by having fire insurance you are totally relaxed that your insurer will help you renovate and build up your house once again.

2. Fire insurance helps you by re-building your home through renovation and reconstruction work and also through giving you a compensation that you can use to stay in a different place while your house is being re-build.

3. It helps in providing a financial protection whenever you need it, whether it is due to a hazard or for a fire incident you will surely be kept protected.

4. By having an insurance policy people tend to start understanding law and thus they happen to stay in a compliance with the rules and regulation of the specific region.

- Cons of fire insurance: the disadvantages are stated below-

1. The cost which is usually associated in buying or purchasing a fire insurance policy tends to be more as it is a special policy. But, even if you pay the policy premiums all together then that would also be possible but it will also charge a higher price because of the accumulated charges of the individual insurance.

2. There are now many types of insurance in the market. With the type of insurance there are many different companies as well. All these companies for making some profit out of the business have a policy to pay some cash as deductibles prior to any insurance claims. These deductibles usually vary from being high to low. For instance, hazard insurance policy for flood or earthquake initially collects the deductibles before the service is given to them.

3. The third disadvantage is the buying process of insurance. At times it has been seen that individuals need to undergo tremendous pain and pressure to attain any insurance of these type. For a single insurance they might need to run between processes to ensure proper and the best insurance policy.

These are the pros and cons of the fire insurance, which are both supported with logics and examples. The fire insurance is more of like a reward which surely pays off during moments of crisis, but as it is a special policy it will have a bit more higher premiums than normal ones.

Major Causes of Fires
Fire protection doesn’t have to be difficult. Even the simplest things can help save you and your family from a home fire.

Accidents and Carelessness

Many people believe that if they are careful they are much less likely to have a fire. While it is true that being careful will make you safer it will not stop fire from happening. Most fires are not caused from carelessness. They are caused from every day living that is almost impossible for us to change.

Electrical Wiring, Electrical Outlets and Faulty Wiring

Whether it’s in an electrical outlet or a short in the wall, many fires are caused by electrical wiring. Older homes are particularly susceptible, as they were not wired for the many, many appliances that we have filled our homes with. Many homes that were built in the 50′s -70′s have aluminum wiring that gets very hot and increases the chance of fire.

Appliances

Lamps, toasters and even baby monitors can short out. Be particularly careful with older appliances and extension cords. Even new appliances can be the source of a home fire. To be safe, appliances should be unplugged when not in use. Unfortunately, not all appliances can be unplugged, leaving your home at risk 24 hours a day.

Heating

Heating is another major cause of residential fire deaths. This is especially true in southeastern states and among wood stove users in the north.

Unattended Stoves

Another cause of residential fires is cooking, but not due to defective stoves or ovens. Often, it is because of unattended pots or the burner being left on accidentally -and who hasn’t done that at least once or twice?

Children Playing with Matches

Children and grandchildren playing with matches are a major source of home fires. According to the Burn Awareness Coalition, burns are the number one cause of accidental deaths in children under two, fire and burn injuries are the second leading cause of accidental deaths in children ages 1-4, and the third leading cause of injury and death for ages 1-18. Matches and lighters in the hands of young children are a significant factor in fire fatalities. Educating parents and grandparents to the seriousness of this issue is paramount.