FIRE INSURANCE- Salient Features

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“FIRE INSURANCE- Salient Features”

The Policy covers loss or damage to the insured property which can be attributed to have been caused directly by any accidental fire.The question arises what is meaning of fire because the fire in common parlance will not be the same as in insurance language. Commonly it is understood that lightening of match stick or lighter can create fire. In day to day life it may be true but under insurance fire has wider meaning.

In normal circumstances fuels in combustible materials and oxygen can live in close association with each other without fire but if heat is introduced the fire will start. Infact, fire is an oxidation reaction in which fuel such as carbon or hydrogen combines with oxygen and produces heat and visible light. Therefore the basic ingredients of any fire are Fuel, heat, Oxygen or Air (22% of air in oxygen).

Technically, the meaning of fire under insurance is actual ignition or burning, under accidental or fortuitous circumstances:

  1. Once it is establishment that there is fire, the term “Fire’ is extended to cover losses/damage to the insured property which may be caused by smoke or heat/Scorching or falling walls or damages caused by Fire brigade i.e. damage caused by water or any other medium used to extinguish the fire including removing/blowing up of the insured property to prevent spreading fire or damage to property to mitigate the loss. It may be pointed out that the Policy covers losses which are directly caused by the accidental fire and not the cause of fire itself. The idea is to cover only those losses which have been caused by external accidental fire but to exclude losses where the insured property itself was subjected to conditions such that the fire originated within the insured property itself.
  2. Besides the following perils are also covered under a Fire Insurance Policy :-
  • Lightning Loss.
  • Explosion due to domestic Cylinders.
  • Aircraft damage- and missile Testing.
  • Riot, Strike, Civil commotions & Malicious damages.
  • Storm, Cyclone, Typhon, Hurricane, Flood & Inundation.
  • Impact damages.
  • Subsidence & landslide.
  • Bursting and over flowing of water from overhead Tanks & Pipes.
  • Leakage from Automatic Sprinkler installations.
  • Bush fire excluding forest fire.
  1. EXCLUSION UNDER FIRE PERIL
  • Accordingly the loss/damage to the insured property caused due to
  • Its own fermentation, natural heating or spontaneous combustion is not held covered under the policy.
  • Undergoing material undergoing heating or drying, if the material is overheated, the process itself can so much heat that the material can catch fire on its own.
  • Burning of Property insured by order of any Public Authority.
  • Loss, destruction or damage caused by war, invasion, act of foreign enemy, civil war, mutiny & civil commotion.
  • Loss or damage caused by radioactive toxic or explosives or nuclear component.
  1. Add on covers by paying additional premium are :-
  • Earthquake Damage.
  • Terrorism Damage.
  • Removal of Debris.
  • Forest Fire.
  • Impact damage due to Insured’s Vehicles; Fork Lifts, cranes etc.
  • Spontaneous combustion.
  • Architects, Surveyors & Engineers fees.
  1. Claim Procedure :-

In the event of Claim: Salient Features:

  • Immediate Intimation to Fire Brigade; and to lodge FIR.
  • Intimate to Insurance Company.
  • Try to minimize the loss by available remedies like water buckets and sand buckets; water sprinklers & hydrants if installed.
  • Try to shifting of goods & machinery if possible.
  • Proper Maintenance of Accounts & stock position and contents on the date of loss & anyother information required as to fire.
  • Preservation of salvage is important.
  • To submit claim form supported by estimated loss.

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