This document discusses fire insurance under the Insurance Act of 1938. It defines fire insurance as a contract where the insurer agrees to indemnify the insured for financial losses caused by fire in exchange for premium payments. It outlines the key principles of fire insurance such as utmost good faith, indemnity only for insured value, and losses must be proximately caused by fire. The document also covers the different types of fire insurance policies, losses that are and aren't covered, and the claims procedure. Overall it provides an overview of fire insurance concepts and practices in India.

1. UNDER
THE INSURANCE ACT,
1938
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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
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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
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4. WHAT IS A FIRE INSURANCE ?
A fire insurance is a contract under
which the insurer in return for a
consideration (premium) agrees to
indemnify the insured for the
financial loss which the latter may
suffer due to destruction of or
damage to property or goods,
caused by fire, during a specified
period.
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5. INSURED
INSURER
PERSON 11/29/2012 5

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.
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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
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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
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9. “CAUSA PROXIMA” in FIRE INSURANCE
If 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.
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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
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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
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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.
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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.
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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
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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.
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16. CONCLUSION
Over time, an increased understanding of
the many factors that contribute to the risk
of fire has led to positive developments in the
fire protection of commercial structures.
Improvements in public fire protection
systems and services, as well as increased
use of private active or passive systems
through fire-protection and loss-control
engineering, has meant an overall decrease in
the cost of fire.
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17. Presented By –
Dhritiman Banik
Niharika Choudhury
Pranab Kr. Sarkar
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Litan Roy 17