Fire Insurance

What is Property Insurance?

As a whole, property insurance covers and protects against nearly all potential risks to property. Property insurance can financially protect you from major risks such as fire and theft, and weather to an extent. Fire insurance is a specialized form of insurance - alongside insurance such as home insurance and insurance against natural disasters, such as earthquakes and floods.

There are two methods of insuring property. “Open perils” insurance policies protect against all causes of property loss. There are some exclusions on open peril policies: you may not be insured against damage resulting from extraordinary occurrences (’acts of God‘); including earthquakes, nuclear incidents, terrorism and war. “Named perils” are the other type of insurance policy. In this policy you have to list possible causes of loss or damage to property in order be insured against those events. Damaging events are often listed according to their likelihood of occurring. Common named perils are fire, lightning and theft.

What is Fire Insurance?

Fire insurance covers a building’s structure (including fixing and fittings) against fire hazards. The insurance provides financial resources to replace loss or damage to property as a result of fire. There are various risks which are covered by most fire insurance policies.

Risks covered by fire insurance policies

Fire insurance business is often governed by a tariff which dictates various terms of coverage, premium rates and the specific fire policy conditions set. In India, the fire insurance policy has been renamed as Standard Fire and Special Perils Policy. Some main risks covered by a fire insurance policy are:

1. Fire.

Damage or complete destruction to property which is insured by fermentation, natural heating or spontaneous combustion. Any heating or drying process cannot be treated as damage due to fire. Burning of property insured by order of any Public Authority is excluded from the insurance cover.

2. Lightning.

Lightning can lead to severe fire damage and secondary damaging effects such as structural collapse. Fire as well as other causes of damage caused by lightning are covered by the fire insurance policy.

3. Bush Fire.

The insurance policy protects against damage from burning of bush and jungles. This includes clearing land and areas using fire, however they often don’t cover damage caused by forest fire.

To make an insurance claim in the event of property loss resulting from fire, covered by a fire insurance policy, you should notify the insurance company immediately. A written claim should be submitted within 15 days of the fire loss, giving detailed information of damages and estimated financial values.

More about home insurance: About home insurance - UK home insurance - Reduce home insurance premiums