This document provides an overview of fire insurance. It discusses key concepts such as utmost good faith, indemnity, insurable interest, and subrogation. It describes what can be covered by fire insurance including buildings, machinery, goods, and household contents. It also summarizes different types of fire insurance policies such as specific insurance, floating insurance, and standing insurance.

2. Division of Insurance Sector
INSURANCE
GENERAL INSURANCE
FIRE
INSURANCE
MARINE
INSURANCE
MEDICLAIM
MOTOR
VEHICLE
LIFE
INSURANCE

3. 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.

4. 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.

5. In strict sense, a fire insurance contract is one:
 Whose principle object is insured against loss or damage occasioned by
fire.
 The extent of insurer's liability being limited by the sum assured and not
necessarily by the extent of loss or damage sustained by the insured.
 The insurer having no interest in the safety or destruction of the insured
property apart from the liability undertaken under the contract.

6. Any person or firm that has a financial interest in
the property to be insured can avail this insurance.
This means that owners of property, firms that
holds property in trust or on commission and
Financial Institutions which have a financial interest
in a property can avail this insurance.

7.  Building
 Electrical installation in buildings
 Machinery, Plant and equipment.
 Goods ( raw materials, stocks in process, semi-finished, finished, etc.) in factories.
 Godowns, Goods in open
 Contents in dwellings (Household)
 Shops, Hotels etc.
 Furniture, fixture and fittings, pipelines located inside or outside the compound etc.

8. Loss Due to Fire caused by:
 Earthquake
 Attack of Foreign Enemy
 Civil War
 Mutiny
 Military Rising
Loss Caused by Subterranean(Underground) Fire.
Loss Caused by burning of properties by order of any public
authority.

9. Selection of insurer (Company)
Presentation of proposal in the prescribed form.
Evidence of goodwill.
Recommendation by agent.
Survey of the subject matter.
Report by surveyors.
Acceptance of proposal.
Depositing of premium money.
issue of cover note.
Issue of insurance policy.

11.  In this policy the cover is a fixed amount agreed upon at the time of
signing the contract.
 The insurance company pays that amount apart from of the actual loss
due to fire.
 The insured is benefited when the market value of the property
declines , but suffer loss when the market value appreciates.
 It is also known as insured policy.
 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.

12. Covers the cost of replacement of object according to its condition.
Any technical improvements will go to the account of the insured.
Reinstatement must be carried out by the insured in order to obtain the
benefits of the special basis of settlement.
The work of reinstatement must be completed within 12 months from the
date of loss, failing which the claim will be settled on market value basis.
The insured also needs to pay higher rate of premium.

13. It is taken out for those goods which are frequently changing in a warehouse.
This policy can be taken on those goods which are lying on different localities
or godowns.
Since quantity of goods lying in the warehouse or at different places fluctuate
from time to time, it becomes difficult for the owner to take a specific policy.
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. To cover the risk of goods lying at different places under one
policy.

14. It is issued for existing stock.
In this policy premium rate shall be adjusted according to increase or
decrease in the value of stock, this change will be notified to the
insurer by the insured.
In case of loss by fire, the amount notified by the insured at the
maturity of the policy is taken as final and indemnified up to that limit.
It is a contract limited to merchandise or stock in trade other than
farming stock

15. 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.
But the actual value of the subject matter is not considered in this respect.
For example, if a property is insured for Rs. 10000 though its actual value is Rs.
20000. In the event of loss to property, not more than Rs. 10000 can be
recovered.

16. 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
• Property security
• Any damage recovery
• Electronic part security