Fire insurance

FIRE INSURANCE

UNDER THE INSURANCE

ACT, 1938 4/9/2013

Mahesh WadnereBhushan PawarTushar SadakalJitendra SakpalPravin Bhalerao

WHAT IS FIRE INSURANCE ???

INSURANCE AGAINST LOSS

DUE TO FIRE.

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.

WHO CAN AVAIL FIRE INSURANCE ??? 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

OBJECTS COVERED UNDER FIRE INSURANCE

1) 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.

OBJECTS NOT COVERED IN FIRE INSURANCE

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

Loss caused by burning of property by order of any public authority

PROCEDURE OF FIRE INSURANCE 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.

MATERIAL INFORMATION THAT SHOULD BE DISCLOSED

Narration of how the premises is occupied and what processes are carried on in the premises.

If there is any hazardous process carried on in the premises

Information on past losses (if any) .

Information about refusal by other co.

FOLLOWING DOCUMENTS 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.

Types ofFire Insurance Policy

VALUED POLICY

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.

REPLACEMENT POLICY

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.

FLOATING POLICIES

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.

ADJUSTABLE POLICIES 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

SPECIFIC POLICIES

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.

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

property security Any damage recovery Electronic part security

ADVANTAGE OF FIRE INSURANCE FOR BUSINESSES

Provide payment

Help to businessman

CALCULATION OF STOCK DESTROYED BY FIRE

Particulars Amount

Estimated Value of Closing Stock as on the date of fire(15/4/2013)

71,000

Less: Salvage Value of stock 13,000

Estimated value of stock destroyed by fire 58,000

Calculation of claim Amount Average clause= Value of stock destroyed X Value of

Insurance Police Value of stock on date of fire 58,000 X 40,000 71,000 =32,676

PROPOSAL FORM FOR FIRE INSURANCE

Full Name of the Proposer : Relationship with the Proposed Insured: Name in which Insurance is to be effected : Address : …………………………………………………………. ………………………………………………………….. Phone No. : Fax No.: Trade/Profession/Occupation: Residence / Office / Trading / …………………….. Insurance PERIOD required FROM……………………….. TO…………………. THE PREMISES : LOCATION 1 LOCATION 2 a) Building / Shop / Warehouse No : b) Flat No. (if applicable) c) Name of Land lord/Landlady : d) Plot No. e) Name of Street f) Area Name / Town g) District / Emirate h) Whether Building is detached YES / NO YES/ NO i) If YES distance from nearest Bldg. j) Whether Premises adjoins another YES / NO YES / NO

j) If adjoining,whether the dividing wall

Is a perfect party wall at least 13 inches YES / NO YES / NO Thick carried through at least one foot Above the roof having no openings

l) Whether there is any wooden inter –

Mediary floor exceeding 10% of YES / NO YES / NO YES / NO Total floor space

CONSTRUCTION m) No. of storeys n) Walls o) Roof p) Adjoining Buildings q) Buildings within 50 feet r) If any bldg. Is within 50 feet is kutcha

are the Walls facing such kutcha Bldg YES / NO YES / NO built of Bricks/Stone and have no openings

OCCUPATION s) Ground Floor t) First Floor u) Upper Floors v) Adjoining Buildings w) Is Trade / Manufacture carried on

In the building If YES state nature

GENERAL INFORMATION 1) How long have you been carrying on this business : 2) Name of your Banker(s) & Branch 3) IS THE POLICY TO BE ENDORSED IN FAVOUR OF ANY BANK(PL. SPECIFY) 4) Are the stock books kept in Fire proof safe : YES / NO 5) If not what precautions are taken to prevent The stock books from being destroyed by Fire 6) Do you keep a duplicate set of stock books in Other premises 7) Are there any existing insurance on the same Property with this or any other Office 8) Are there any circumstances which appear to Increase the risk ? If so please provide details 9) Has any office for reasons whatsoever(a) declined (b) cancelled OR (c) refused to renew any policy on this or any other risk of yours (Pl. provide details) I / We hereby declare that the above information is true and correct to the best of my knowledge and information and I/We have not deliberately or intentionally with-held herein any material information that could have a bearing on the acceptance or otherwise of this proposal. I / We further agree that issuing or submitting proposal form does not bind either Alliance Insurance P.S.C. to provide terms or to accept cover or me / us to insure the risk with Alliance Insurance P.S.C. How-ever if the insurance is effected with and by Alliance Insurance P.S.C. this proposal shall be the basis of the contract between me / us and Alliance Insurance PSC. Signature of the Proposer………………………… Agency : Date ===============================================================

ALLIANCE INSURANCE P.S.C. , P.O. Box 5501 , DUBAI (U.A.E.)

MAJOR PLAYER WHO PROVIDE INSURANCE 1. Life Insurance corporation of India (LIC)

2. Bajaj Allianz General Insurance

3. ICICI Prudential Life Insurance

4. ICICI Lombard General Insurance

5. Birla Sun Life Insurance

6. Tata AIG General Insurance

7. New India Assurance Co.

8. Iffco Tokio General Insurance

9. Oriental Insurance Co.

10. HDFC Standard Life Insurance

Conclusion

INSURED PERSON

INSURER

Get insured

Be Safe !!!!

THANK YOOU !!!