Fire insurance

What is Fire Insurance. A fire insurance policy involves an insurance company agreeing to pay a certain amount equivalent to the estimated loss caused by fire to the insured, within the time specified in the contract

1. What is Fire Insurance A fire insurance policy involves an insurance company agreeing to pay a certain amount equivalent to the estimated loss caused by fire to the insured, within the time specified in the contract

2. Objective Covered U nder Fire Insurance Building 2) Electrical installation in buildings 3) Machinery, Plant and equipment 4) Goods ( raw materials, stocks in process, semi finished, finished etc ) in factories 5) Godowns , Goods in open 6) Contents in dwellings (Household) 7) Shops, Hotels etc. 8) Furniture, fixture and fittings, pipelines located inside or outside the compound etc.

3. Objective Not Covered Under Fire Insurance 1. Loss Due to fire cause by Earthquake Attach of foreign enemy Civil strife (war ) Mutiny (Pub. Vs Govt.) Military rising Loss caused by subterranean(Underground) fire 3. L oss caused by burning of property by order of any public authority

4. Following Document Are Required For Fire claim Copy of the policy Survey report Claim form duly completed by the insured Police report (for riot claims) / Panchanama (fire loss) Fire brigade report Meteorological report (in case of flood, cyclone etc. claims) Photographs Detailed claim bill with necessary bills / voucher Copy of enquiry committee report on cause of loss if enquiry is ordered by insured.

5. PRINCIPLES OF INSURANCE Utmost Good Faith Insured must disclosed all relevant fact to the insurer Indemnity Underwriter agree to indemnity the insured against losses to the extent of amount insured Insurable interest The insurable interest must exist both at the time of effecting the insurance as well as at the time of the loss Subrogation The insurer after paying compensation to insured , become entitled to claim all the right of the insured against Third party Causa Proxima Losses resulting from fire , margin or some other related cause, being the proximate cause of losses are covered

6. Valued Policy It is usually taken where it is not easy to ascertain the value of the property. In this policy the indemnity is a fixed amount agreed upon at the time of signing the contract. The insured is benefited when the market value of the property declines , but suffer loss when the market value appreciates. The valued insurance policy is usually offered for such items like jewellery , furs, or paintings, which value is difficult to estimate once they are damaged or destroyed by fire.

7. Floating Policy It is taken to cover loss on goods, which are lying in different places and the stock of which is almost continuously fluctuating. It is taken out for those goods which are frequently changing in a warehouse. Floating policies are suitable to those traders or products whose raw-materials or merchandise are lying at different localities or godowns . For example:-Some of the goods of other trader are kept in one godown , and few kept in another godown , some kept in the railway godown or some at the sea port open.

8. Specific Policy A specific policy is a type of policy in which the property is insured for a specific sum irrespective of its value. If there is loss, the stated amount will have to be paid to the policyholder. The actual value of the subject matter is not considered in this respect. For example: If a property is insured for taka 10000 though its actual value is taka 20000. In the event of loss to property, not more than taka 10000 can be recovered.

9. Average Policy Where a property is insured for a sum which is less than its value, the policy contain a clause that the insurer shall not be liable to pay the full loss but only that proportion of the loss which the amount insured for, bears to the full value of the property. For example: A value of the property is taka 1,00,000 . It is insured for taka 60,000 (60% of the total value) The amount of loss is taka 60,000.The insurance company will not pay taka 60,000 to the policyholder but will pay taka 36,000 (60% of taka 60,000 ).

10. Advantage Of Fire Insurance Fire insurance provides advantages to the enterprise in the following ways Loss of life Machines security Medical expenses Fire insurance provides the advantages for the homeowner in these ways P roperty security Any damage recovery Electronic part security