If we observe the kind of accidents / mishaps happening in warehouses / office buildings and houses, we will find that fire is the key cause for the same. Fire due to short circuits is very common. Yet, in most cases, houses and properties are not insured against fire.
Fire insurance represents a contract where indemnification against the fire consequences is done by reimbursement of the damage either in installments or variable lump sums. This consideration is also applicable for an agreed time period and fixed amount if fire leads to injury or loss. There is a document named “Policy of Fire Insurance” embodying the contract. When insurance holder files a claim against the fire hazard, insurance company hands over a document called “Cover Note” to the insured person after the claim acceptance. This cover note consists of an obligatory contract for the time duration of the fire hazard occurrence.
Benefits of Fire Insurance
Generally, fire insurance contract is valid for a period of one year and it can be extended from the insurance holder’s side. Moreover, it can be terminated by either side if policy expiration deadline has passed. This insurance not only provides safety against the fire risks render but it also plays a major role in reducing the fire waste. Fire insurance can really help insurance holders in recovering financially as well as emotionally. It can provide following benefits to the insurance holders:-
Replacement of Contents : Fire hazard causes irreparable damage to the lock, stock and barrels of the house / property. After successful acceptance of the claim, insurance holders get replacement reimbursement up to a pre-defined value of the business or household contents.
Provisional Housing : This insurance protects insurance holders from the loss of home, business and other related possessions. Payments for the provisional housing represent one of those protections where insurance holders can stay for a particular period of time. In this time, they can repair the structure of their building before moving back to the place.
Rebuilding of the Damaged : Fire brings destruction to a building and it can lead to significant damage to the house or business structure. Under this insurance, policy holders get coverage for the replacement or rebuilding of the damaged sections. Before committing to the policy, people need to make sure that swimming pool, garage and outhouses are included in it.
Preventive Measurements : Policy costs can be decreased by the usage of sprinkler systems, fire alarms and other measurements of safety inside the home or business building.
Types of Fire Insurance
Fire insurance policies can be divided into following types:-
Valued Policy : Valued policy represents a specific insurance policy where subject matter’s agreed value is mentioned in the policy guidelines. This value may not be the actual value but insurance company reimburses the property’s admitted value.
Unvalued Policy : In this policy, subject matter’s value is not mentioned in the policy guidelines. After the fire hazard, the lost value is calculated by assessment and it is reimbursed to the insurance holder. This policy is also known as open policy.
Average Policy : Average policy got its name from the average clause it contains. Under this clause, insurance holders would be reimbursed only a percentage of the losses incurred.
Specific Policy : Under this policy, there is definite sum for insurance. There is no particular consideration of the subject matter’s actual value but reimbursement is done on the basis of that definite sum.
Stock Declaration Policy : This policy suits for covering the goods which can undergo the value fluctuations all the way through the contract duration. Insurance holders are supposed to pay 3/4th of the premium in advance. All the calculations related to the final premium and average stocks are done at the end of the year.
Floating Policy : This policy revolves around the fluctuating risk factors related to many goods located in different regions for supply to different markets. This policy is taken under one premium and one sum by the businessmen whose commodities are located at warehouses, stores and docks.
Standard Fire Policy : This policy refers to the recompense of all the direct damages or losses caused by burning and lighting. There are supplementary covers against hair flood, earthquake, cyclone, explosion and riot.
Profit Loss Policy : If there is any profit loss due to fire, then profit loss policy can cover the loss. It is also called as consequential loss policy.
Schedule Policy : This policy provides coverage under collective terms like property details and their pertaining premiums.
Reinstatement Policy : Under this policy, insurance holders get more than the real value for covering the replacement cost of the insured property. This policy is not common these days and it is also called as Replacement Policy.
Excess Policy : This policy takes care of the merchandise stock which has constantly fluctuating value. Therefore, it does not have a fixed value of returns and insurance holders need to take two policies as ordinary and excess policy. Ordinary policy is required for minimum stock value and excess policy is required for excess stock value. Insurance holders should report the actual stock value periodically.
Discounted Maximum Value Policy : This policy is required for covering the maximum risk amount. At the policy maturity, 33% of the paid premium is reimbursed back to the insurance holder.
Sprinkler Leakage Policy : This is a special type of insurance policy taking care of the damage done by the water or liquid leakage.
Various Fire Insurance Companies
Most of the companies provide user-oriented fire insurance plans. Some of these companies are:-
Providence Mutual fire insurance company was contracted by Rhode Island’s General Assembly in 1800. They offer fire and allied lines insurance protecting insurance holders against the dangers of fire, windstorm, lightening, collapse and aircraft. Apart from providing fire insurance, Providence Mutual also provides other insurance plans such as:-
- Homeowners and renters
- Commercial plus personal auto
- Commercial package policy
- Inland marine
- Commercial as well as personal umbrella liability
United States Fire Insurance Company
United States Fire Insurance Company was incorporated in 2003. Company is located in Morristown, New Jersey and they provide protection against fire hazards. In addition to this, they also provide other types of insurances like health, auto, home, airplane, boat and business.
Barrington Insurance Brokers
Barrington Insurance Brokers is in insurance business for last 22 years. They provide fire insurance while covering following aspects:-
- Temporary accommodation
- Damage rebuilding
- Content replacement
- Preventive measurements