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Everything About Fire Insurance

Updated: Jan 12, 2021

Fire insurance policy is an insurance contract between the policyholder and the insurance company, where the insurance provider agrees to indemnify for the financial loss the insured suffers due to a fire outbreak. The insured pays an annual premium to avail the policy benefits and renews the policy without fail.


Fire Policy Covers The Following


Protection


Financial protection against damage or devastation of movable and immovable property in case of fire explosion.


Property Covered


The type of property to be covered under fire insurance include buildings, plant, equipment, machinery, stock and content like furniture and fittings, cables, art and craft related items etc.


Other Perils


Other perils covered under fire insurance include lightning, malicious damage, explosions, impact damage, natural disasters, bursting of water tanks, subsidence and landslide.


Exceptions


The permanent exclusions of fire insurance are any loss caused by war or warlike situation, civil unrest, nuclear attack, pollution, political unrest, mechanical breakdown etc.


Tenure of Fire Insurance


Usually, fire insurance comes with one-year tenure, except for dwellings where a policy is designed for long term.


The loss caused by the fire must satisfy two conditions to be covered under the fire insurance.


  1. It must be actual fire so no fire-related damage by any other form will be covered.

  2. The fire should be accidental. That means no intentional fire damage will be covered.

Therefore, no loss due to smoke or resembling to fire incidents is not covered.


Things To Consider Before Buying Fire Insurance


Fire insurance plays a vital role in financial protection in case of a fire outbreak. It is a wise choice to buy an appropriate fire insurance that suits your needs. Consider the following factors before purchasing a fire policy


1. Select Sum Insured Wisely


At the time of buying fire insurance, it is imperative to select the right coverage. You shouldn’t buy a plan in hurry and end up regretting at the later stage. In case of fire insurance, prepare the list of items that you want to secure. Especially in case of a property that is on a lease, you will need to insure its content.


2. Say YES to Deductibles


In insurance term, deductible means the amount the insured agrees upon to pay in case of a claim. By opting for the higher deductible, you can save on your fire insurance premium.


3. Exclusions- Dare to Ignore


It is really important to be aware of the fire insurance policy exclusions. There are some exclusions for which the claim will not be entertained by the insurer. If the fire happens, due to your carelessness or due to war and allied perils etc the insurer will reject the claim. The insurance company can reject the claim in case of intentional damage. It is important to understand all the situations when you can’t claim the policy.

4. Try to Save on Premium


Adopt safety precautions like no smoking zone, fire extinguishers etc. These will help you get the policy at an affordable rate.


A careful comparison of available fire insurance quotes offered by the insurers can lead you to settle with an adequate fire insurance plan in India. Through comparison, you can also look for what are the policies available at a competitive rate around you. Thus, policy review is essential at the time of fire insurance renewal.


Thus, it makes it important to have fire insurance for your business or newly owned property. Even if you have taken all the necessary precautions to protect your asset, it is always wise to have a backup plan. We can help you acquire the best fire policy at the most affordable rate. To know more about Fire Insurance and related matters you can always reach out to us through our email or website.

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