Fire insurance


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Pranab Kr. Sarkar
Tezpur University

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Fire insurance

  1. 1. UNDER THE INSURANCE ACT, 193811/29/2012 1
  2. 2.  What is INSURANCE ? What is a FIRE INSURANCE ? Main PRINCIPLES of Fire Insurance Causa Proxima Types of Fire Insurance Types of losses covered Types of losses not covered Procedure for Fire Insurance Claims Conclusion Thanks 11/29/2012 2
  3. 3.  A promise of compensation for specific potential future losses in exchange for a periodic payment. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment 11/29/2012 3
  4. 4. WHAT IS A FIRE INSURANCE ?A fire insurance is a contract underwhich the insurer in return for aconsideration (premium) agrees toindemnify the insured for thefinancial loss which the latter maysuffer due to destruction of ordamage to property or goods,caused by fire, during a specifiedperiod. 11/29/2012 4
  5. 5. INSURED INSURER PERSON 11/29/2012 5
  6. 6. CHARACTERISTICS OR PRINCIPLES FOR A VALID CONTRACT OF FIRE INSURANCE A contract of indemnity Loss can only be recovered upto the sum which was insured. Contract of utmost good faith Insurer must disclose all the necessary facts correctly and fully, otherwise voidable. Year to Year contract A Fire Insurance is issued only for 1 year. 11/29/2012 6
  7. 7. CHARACTERISTIC S CONTD…… Principles of Subrogation Right for an insurer to pursue and Contribution a third party that caused an insurance loss to the insured Insured with more than one insurer, each insurer has to meet the loss only rateably Loss Through Fire It covers only the loss caused proximately by FIRE 11/29/2012 7
  8. 8. CHARACTERISTIC S CONTD…… Does not carry any Surrender Value or Paid-up Value. If surrendered voluntarily, it does generate any value. After bearing loss only it can be claimed. Insurable Interest The assured must have INSURABLE INTERST in the subject.  i.e. The owner of the property, upto it’s value.  The mortgagee, pledgee, bailee, factor, carrier, trustee etc 11/29/2012 8
  9. 9. “CAUSA PROXIMA” in FIRE INSURANCEIf the proximate cause of loss or damage is fire, then loss is recoverable.  The Loss or damage must be related to the subject matter of the policy.  The Loss or damage must be caused by ignition or fire  the ignition must be of goods of insured or of the premises where it is placed. 11/29/2012 9
  10. 10. TYPES OF FIRE POLICIES Ordinary Policy Policy-amount = Real value of property or goods insured Specific policy “UNDER INSURANCE” Means the policy amount < value of the property. Comprehensive policy “ALL IN ONE POLICY” It covers all the risks like fire, theft, burglary, third party risks, etc 11/29/2012 10
  11. 11. TYPES OF FIRE POLICIES CONTD………. Average Policy Here the Insured and Insurer share the loss caused by fire. Floating Policy Is a policy which covers loss by fire caused to property belonging to the person located at a different place Replacement or Re-instatement The Insurer agrees to pay the cost of policy replacement of the property damaged or destroyed by fire 11/29/2012 11
  12. 12. TYPES OF LOSSES COVERED Goods spoiled by water used to extinguish the fire Pulling down of adjacent premises by the fire brigade in order to prevent the progress of flame Breakage caused by throwing furniture out of window. Wages paid to persons employed for extingu- -ishing fire. 11/29/2012 12
  13. 13. TYPES OF LOSSES COVERED Loss due to fire caused by - Earthquake, invasion, Act of foreign enemy, hostilities or war, Civil strife, riots, Mutiny, martial law, Military rising, rebellion loss caused by subterranean (underground) fire. loss caused by burning of property by order of any public authority. 11/29/2012 13
  14. 14. LOSSES COVERED Contd…… Loss by theft during or after the fire. Loss or damage to property caused by fermentation or spontaneous combustion Loss or damage by lightening or explosion is not covered unless these cause actual ignition 11/29/2012 14
  15. 15. Procedure for Fire Insurance Claim Notice of LOSS to the Insurance Company Report to the POLICE if it is ARSON Submission of Claim Statement + Evidence to support the same. 11/29/2012 15
  16. 16. CONCLUSIONOver time, an increased understanding ofthe many factors that contribute to the riskof fire has led to positive developments in thefire protection of commercial structures.Improvements in public fire protectionsystems and services, as well as increaseduse of private active or passive systemsthrough fire-protection and loss-controlengineering, has meant an overall decrease inthe cost of fire. 11/29/2012 16
  17. 17. Presented By – Dhritiman Banik Niharika Choudhury Pranab Kr. Sarkar 11/29/2012 Litan Roy 17