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FIRE INSURANCE

UNDER THE INSURANCE ACT,

1938

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What is INSURANCE ? What is a FIRE INSURANCE ? Main PRINCIPLES of Fire Insurance Causa Proxima Types of Fire Insurance Types of losses covered Types of losses not covered Procedure for Fire Insurance Claims Conclusion Thanks

ROAD MAP OF PRESENTATION

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A promise of compensation for specific potential future losses in exchange for a periodic payment.

Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment

WHAT IS INSURANCE ?

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WHAT IS A FIRE INSURANCE ?

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.

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INSURER

INSURED PERSON

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CHARACTERISTICS OR PRINCIPLES FOR A VALID CONTRACT OF FIRE

INSURANCE A contract of indemnity

Loss can only be recovered upto the sum which was insured.

Contract of utmost good faith

Year to Year contract

Insurer must disclose all the necessary facts correctly and fully, otherwise voidable.

A Fire Insurance is issued only for 1 year.

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CHARACTERISTICS

CONTD…… Principles of Subrogation and Contribution 

Loss Through Fire 

Right for an insurer to pursuea third party that caused aninsurance loss to the insured

It covers only the loss caused proximately by FIRE

Insured with more than one insurer, each insurer has to meet the loss only rateably

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Does not carry any Surrender Value or Paid-up Value.

Insurable Interest The assured must have

INSURABLE INTERST in the subject.

i.e. The owner of the property, upto it’s value. The mortgagee, pledgee, bailee, factor, carrier, trustee etc

If surrendered voluntarily, it does generate any value. After bearing loss only it can be claimed.

CHARACTERISTICS

CONTD……

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“CAUSA PROXIMA” in FIRE INSURANCE

If the proximate cause of loss or damage is fire, then loss is

recoverable. The Loss or damage must be related to the subject matter of the policy.

The Loss or damage must be caused by ignition or fire

the ignition must be of goods of insured or of the premises where it is placed.

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TYPES OF FIRE POLICIES

Ordinary Policy

Specific policy

Comprehensive policy

Policy-amount = Real value of property or goods insured

“UNDER INSURANCE”

Means the policy amount < value of the property.

“ALL IN ONE POLICY”

It covers all the risks like fire, theft, burglary, third party risks, etc

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Average Policy

Floating Policy

Replacement or Re-instatement policy

Is a policy which covers loss by fire caused to property belonging to the person located at a different place

Here the Insured and Insurer share the loss caused by fire.

The Insurer agrees to pay the cost of replacement of the property damaged or destroyed by fire

TYPES OF FIRE POLICIES

CONTD……….

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TYPES OF LOSSES COVERED

Goods spoiled 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 caused by throwing furniture out of window.  

Wages paid to persons employed for extingu- -ishing fire.

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TYPES OF LOSSES COVERED

Loss due to fire caused by -

Earthquake, invasion, Act of foreign enemy, hostilities or war, Civil strife, riots,

Mutiny, martial law, Military rising, rebellion

  loss caused by subterranean (underground) fire. 

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

NO

T

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Loss by theft during or after the fire. 

Loss or damage to property caused by fermentation or spontaneous combustion

  Loss or damage by lightening or explosion is not covered unless these cause actual ignition

LOSSES COVEREDContd……

NOT

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Notice of LOSS to the Insurance Company

Report to the POLICE if it is ARSON

Submission of Claim Statement + Evidence to support the same.

Procedure for Fire Insurance

Claim

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CONCLUSION

Over time, an increased understanding of the many factors that contribute to the risk of fire has led to positive developments in the fire protection of commercial structures. Improvements in public fire protection systems and services, as well as increased use of private active or passive systems through fire-protection and loss-control engineering, has meant an overall decrease in the cost of fire.

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Presented By – Dhritiman Banik Niharika Choudhury Pranab Kr. Sarkar Litan Roy