What is the significance of Fire Insurance?

Fire accidents are very unpredicted and painful as it causes a huge loss to the property. So, having fire insurance is equally essential as essential to your life is to you. In this policy, the insurance company will provide money as compensation, if your property gets destroyed or damaged due to fire. In other words, you can say that the insurance company will reimburse the cost of damage to insured property caused due to fire. Fire insurance policies will also provide coverage for the reconstruction or repairing of nearby structures. Additionally, fire insurance will also provide financial security for the people whose livelihood is affected due to that damage in the property.

All private companies of fire insurance in India are monitored and regulated by IRDA. As per the plan of fire and special perils, all the permanent and movable property available on land can be insured. Industrial buildings, malls, restaurants, hospitals, apartments, shops, offices; all these can be insured with fire insurance in India.

Importance of fire insurance policy

  • You can provide security to your home, offices, and shops from fire hazards. The insurance company also offers the price of the procession and provides property alternatives for damaged buildings.
  • The insurance companies will also provide you with compensation for home furnishing materials and the other belongings damaged in a fire such as a furniture, curtains, computer, and electronic items along with the compensation of damaged property.
  • For industries, fire insurance companies will provide the costing for repairing or maintenance of machinery and raw material damaged due to fire.
  • For companies, insurance companies will provide the medical expenses for the employees who get injured in the fire accident.

Instance to be covered under Fire insurance policies:

  • Fire insurance will cover the loss or damage caused due to a fire incident.
  • Damage caused due to implosions and explosions is also covered in fire insurance.
  • This will also cover the damage that is caused due to thunder fire or lightning.
  • Gas explosions are also covered under fire insurance.
  • The fire caused due to any unidentified object dropped from aircraft or other airborne means will also be covered in fire insurance.
  • Damage caused to your personal property resulting from terrorist attacks, riots or any public event will also include under fire insurance.
  • Fire insurance will also provide coverage for damage caused due to fire by natural calamities like typhoons, tornadoes, cyclones or floods.
  • Damage resulting due to landslides will also be covered under fire insurance.

Types of Fire insurance policies

  1. Valued Policy: Under this policy, the specific value will be decided at the time of taking the policy. The insurance company will provide a fixed amount in case the object is damaged or destroyed due to fire. It doesn’t matter whether the product has more or less market value, the company will only provide the predefined price of that product.
  2. Floating Policy: If a person is engaged in import-export business then this policy will provide you optimum coverage from loss. This policy will cover all the damage of products lying at different places. The product should belong to the same person and he has to pay a single premium to cover all those goods.
  3. Comprehensive Policy: Under this policy, the insurance company will provide a specific amount of money to cover the loss of theft, damage due to pests, lightning, burglary, riots, and explosion, along with the cost of fire-related accidents.
  4. Consequential loss Policy: If a fire accident will happen in any industry, it will result in relocating machinery to a different place. At that time the production will also suffer and that directly affects the profit or loss in business. Consequential loss Policy will provide the coverage of loss caused due to other consequences of any particular fire hazard. This decline in profit can be calculated on the base of the loss in sales.
  5. Specific Policy: In this policy, you will only get a specific amount of sum insured or less than the specified amount. If the cost of damaged property is higher than the sum insured then also you will be provided the amount of sum insured and the insurance company will not take any responsibility for the extra damaged property.
  6. Replacement Policy: In this policy, the company will provide the compensation that is equal to the price of damaged assets, so that it can be replaced with the new one without giving any additional cost. The compensation amount will depend on the market price of new assets.

How can you choose the best Fire Insurance Policy?

The main tension arises when you thought of buying any insurance plan from the multiple options available in the market. You will surely get confused or stuck with the provided features or coverages. In such a case, the best possible option you can avail is checking for online quotes and taking advice from an expert. You will also compare the policies online to get better clarification about coverage and other features of the policy. By checking online, you will surely get the best policy that will suit your pocket and also fulfill your requirements.

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