Fire Insurance: Types, Benefits, Inclusions and Exclusions
Fire insurance is a type of insurance that provides coverage for property damage and loss caused by fire. It helps to protect the policyholder from financial loss due to fire damage to their home, business, or other insured property.
What is Fire Insurance?
Fire Insurance is the type of insurance which provides coverage for loss or damage caused by fire to your property. It can be bought as a part of property insurance or even as standalone insurance. As the estimation from fire loss is unpredictable, the policy will be issued with a fixed compensation. The insured will receive the amount agreed upon the time of claim during a fire accident. Even home owners can take a fire insurance to protect the structure of their homes. It also covers the cost of replacing items in the house such as AC, television, and other electronic gadgets.
Types of Fire Insurance Policies
| Policy Type | Description |
|---|---|
| Valued Policy | The insured value is fixed at the time of policy purchase. In case of loss (e.g., for items like jewelry), the pre-agreed amount is paid, regardless of market value. |
| Floating Policy | Covers goods stored at multiple locations (e.g., godowns, offices) under a single policy. Suitable for businesses with inventory across branches. |
| Specific Policy | The insurer pays either the predefined policy amount or the actual loss amount—whichever is lower. Ideal for fixed coverage needs. |
| Comprehensive Loss Policy | Also called “All Risk Policy.” Offers extensive protection against fire, theft, burglary, explosion, etc. Best for maximum risk coverage. |
| Average Policy | Includes an “Average Clause” to penalize underinsurance. If a property worth ₹40 Lakhs is insured for only ₹20 Lakhs, payout will be proportionate. |
| Consequential Loss Policy | Covers losses beyond physical damage—like production halts or machinery downtime—after a fire accident. |
| Replacement Policy | Provides support for replacing total loss property, helping you resume business operations from a new location. |
Coverage Offered under Fire Insurance
- Loss of Goods due to fire accident
- Living expenses due to the damage of the insured property
- Loss to the adjacent buildings or property near the accident site
- Fee to the firefighters
- Fire triggered by electricity
Exclusions in a Fire Insurance Policy
- Fire caused by war or nuclear risks, riot or earthquake
- Intentional arsoning by enemies
- Underground Fire
- Loss of goods due to theft after fire
- Human-made causes of fire with malicious intent
How to Raise a Claim for Fire Insurance?
For obtaining compensation for loss due to a fire accident, you need to raise a claim. Here is the process that you must follow in order to raise a claim,
- Immediately inform the insurance company after the fire accident
- Contact the police and fire brigade
- Insurance company will appoint a surveyor to assess the damage
- Submit the claim form with supportive document
- Based on the surveyor’s report, the claim will be settled by the insurance company within 10-15 days from the date claim request was placed
Advantages
There are several reasons why you should apply
- IVA Insurance is an IRDA Approved Direct Broker (Life & General).
- We are here to assist you 24/7.
- Our unbiased approach ensures you get the best options.
- With over 55 insurance companies and hundreds of health policies, Fincover cuts through the clutter and helps you choose the one that is best for you.
FAQ
1. What are the assets I can include under Fire Insurance?
Building and contents such as household equipment, Furniture, fixtures, fittings, Machinery, stocks, good in case of factory can be included in your coverage.
2. Does the policy only fire?
Though the name of the policy is fire insurance policy, it can cover a host of other related incidents such as lightning, explosion/implosion, Aircraft damage, impact damage etc.
3. What is the duration of Fire Insurance Policy?
Usually, policies are insured for one year for commercial building. For residential buildings, longer durations are issued. You will have to check the respective insurer you are planning to buy for further details about the same.
4. If I have a comprehensive policy, Do i need to buy a separate fire insurance policy?
Not required, usually comprehensive insurance policy cover fire accidents too.
