Fire insurance means insurance against any loss caused due to fire. According to Section 2(61) of the Insurance Act defines fire insurance as: “Fire insurance business means the business of effecting, otherwise than incidentally to some other class of business, contracts of insurance against loss by or incidental to fire or other occurrence customarily included among the risks insured against in fire insurance policies.”
Fire insurance policies can be of following types:
A specific policy is that policy under which the liability of the insurer is limited to a specified sum which is less than the value of property.
A valued policy is that policy under which the insurer agrees to pay a specific sum irrespective of the actual loss suffered. A valued policy is not a contract of indemnity.
The insurer undertakes to compensate the employers against the losses suffered by him due to the employees. The losses may be due to fraud, dishonesty and misappropriation of funds, goods or damages to property caused by the employees.
IIn such policies the insurer undertakes to pay no the value of the property lost, but the cost of replacement of the property destroyed or damaged. The insurer may retain an option to replace the property instead of paying cash.
When a policy covers property situated in different places it is called a floating policy. Floating policies are always subject to an average clause.
- Key benefits -
- Cover your property against fire
- This is a basic fire insurance plans which indemnifies you against damage to your property caused by fire, lightning or explosion only.