Fire Insurance

After marine insurance, fire insurance was created. Only those involved in any kind of trade will
benefit from marine insurance. People from all walks of life may be affected by the flames. In four
days, the Great Fire of London of 1956 burned 13,000 homes. Fire insurance was born as a result
of the “Great Fire.” Fire insurance is a contract that indemnifies the insured for losses incurred.
This contract does not aid in the control or prevention of fire, but it does pledge to compensate for
the damage. Fire insurance is a contract between two parties, namely, the insurer and the insured,
under which the insurer agrees to compensate the insured for losses incurred in exchange for the
insured paying an amount known as the “Premium.”

A fire insurance contract is described as “an arrangement” in which one party, in exchange for a
consideration, agrees to indemnify the other party for financial loss sustained as a result of the
certain subject matter being damaged or destroyed by fire or other defined perils up to an agreed
sum.

Fire insurance is a form of property insurance that offers extra compensation for loss or damage to
a building that has been damaged or destroyed by a fire. Fire insurance can be capped at a rate
lower than the expense of the damages incurred, necessitating the purchase of a separate fire
insurance policy. The policy reimburses the policyholder for losses on either a replacement-cost or
a real cash value basis. While some homeowners insurance plans offer fire coverage, some
homeowners can find it insufficient.

The word fire insurance refers to a form of property insurance that covers fire-related damage and
damages.

Most plans provide some form of fire insurance, although homeowners may be eligible to buy extra
coverage in the event that their property is destroyed or damaged by fire. Purchasing extra fire
coverage helps to offset the cost of replacing, repairing, or rebuilding property that exceeds the
property insurance policy’s cap. General exclusions such as war, nuclear risks, and similar perils
are common in fire insurance policies.

The word “fire” must meet two requirements:

(a) There must be actual fire or ignition; and

(b) The fire must be accidental.

The property must have been harmed or burned by fire. If the property is destroyed by heat or
smoke without being ignited, it is not protected by the term “fire.”

Procedure for Fire Insurance

When an individual or a business needs to insure their property, they must fill out a proposal form.
The form includes columns for details about the insured land. The proposal includes information
about the house, its location, and its contents. All of the questions on the questionnaire must be
answered correctly by the insured.

A fire insurance policy is based on trust. When an underwriter receives a request, he or she
evaluates the potential loss. The plan may be approved upon receipt, or a surveyor may be
dispatched to evaluate it. The contract is established when the underwriter approves the proposal.
Occasionally, a cover note is released immediately, and the policy is submitted later. The insurer
is obligated to indemnify the liability under a cover notice. The risk coverage begins with the
payment of the premium.

A fire insurance policy is typically provided for one year, although it can be reviewed on a regular
basis. The insurance agent notifies the insured two weeks before the policy’s expiration date so that
it can be extended. However, once the program expires, there is a two-week grace period. The
insured will renew it during the grace period, and insurance coverage is maintained in the
meantime.

The insured must have an insurable interest in the property to be insured both at the time the policy
is taken out and at the time the loss occurs. If the insurable interest is transferred to another
individual, the insurance policy terminates unless the underwriter (insurance company) agrees to
extend it.

Principles of Fire Insurance

The following are the principles of fire insurance:

1. Insurable Interest in fire insurance.

2. The principle of Good Faith in fire insurance.
3. The principle of indemnity.
4. Proximate Cause of fire insurance.
5. The doctrine of Subrogation.
6. Warranties in fire insurance.
Burglary Insurance

A burglary insurance policy is a type of crime insurance that covers losses resulting from
burglary. Put simply, burglary refers to when someone uses force to unlawfully enter
someone else's property - even if they did not steal anything in the end.

Types of losses insured include:

• Theft of property from a closed premises such as a home, place of business or

automobile.
• Damage caused by the intruder in the process.

Even though the words burglary, robbery, and theft are often used interchangeably in real
life, they are actually very different legally speaking and in the insurance world. The
definitions are nuanced but in the insurance world, burglary is defined as theft when force
was used to unlawfully enter someone else’s property.

In order for an insurer to recognize your claim, you have to file a police report and show
some signs of forced entry such as a broken window or scratch marks on the door. If you do
not have these things, the insurer will not count it as a burglary and therefore you would not
have coverage.

The broadest peril for this type of loss is “theft.” In insurance terms, theft is defined as any
means of taking without the owner's consent, regardless of the method.

So if you see theft as an insured peril on your policy, you can rest easy that your property is
well protected against all types of crime losses whether that be burglary, robbery, or
otherwise.

Explaining Burglary Insurance

The terms “burglary” and “robbery” are often used interchangeably but they are very
different things when it comes to insurance. While they both involve some sort of theft,
unlawful entry, and the use of force, the key differentiator is who or what that force is used
on.

Robbery is defined as using force, the threat of force or intimidation to steal from someone,
meaning there was a victim involved for the act. An easy example of this is with bank
robberies where the tellers and customers are held up.

Burglary on the other hand involves felonious or forceful entry but no force was used on a
person. One example is a cat burglar sneaking in and out without anyone noticing or getting
involved.

In order to substantiate burglary claims, insurers will want to see proof of ownership of the
stolen item(s), a police report and proof that force was used to enter the premises. Examples
of this include broken windows, scratch marks on the doors, etc. If there were no signs of
forced entry, then you would not be covered under burglary. It would fall under other
categories of coverage such as theft or robbery.

Burglary insurance is typically included as a part of most insurance policies including:

• Travel insurance.
• Home insurance.
• Commercial property insurance.

Although all of those policies have burglary coverage, they are usually quite limited in scope.
They usually do not insure a broad range of property (ie. stock and equipment only but no
burglary coverage for money or jewellery) or have strict limits of insurance that restrict how
much compensation you get if property is lost by burglary.

To expand your burglary coverage, there are different crime insurance riders (endorsements)
you can add on to your policy to cover a wider range of property and increase the limits of
insurance for burglary losses. One example is through a safe burglary policy which protects
your safe and any property inside it from burglary losses.

What is covered under a standard burglary policy?

A standard burglary policy can be classified into three types, namely, total loss, first loss and
stock declaration policy. A total loss policy covers for the full value of the property insured,
whereas a first loss policy allows a proposer to insure a certain percentage of stocks when the
probability of the entire stock being stolen is less.
Thus, under a first loss policy, in case you anticipate that only a certain amount will be burgled,
you can opt to insure only the maximum amount you wish to be protected for. Although, it
ensures you pay lesser in premiums, the same may back fire in case the losses extend beyond
your sum insured.
If your inventory keeps fluctuating the year round, you will need a stock declaration policy.
Under this policy, the sum insured will be fixed at the maximum value of your inventory that
you anticipate to hold at any point of time.
Such policies cover the loss or damage caused to the property only by forcible and violent entry
into the premises as under the definition of ‘Burglary’. Damage caused by any other means is
not covered and the compensation provided will be to the extent of the basic value of the
property, subject to maximum limit.
What is excluded from a standard burglary policy?
The insurer will not be liable for the theft of luxury watches, jewellery, money, gold, precious
stones, drawing artefacts, etc. unless these are specifically insured. The insurer will also be not
liable for the loss if the damage is caused by insured or any member of insured's household or
staff.
Besides, the policy ceases to exist if:
 • The property is left uninhabited for more than a week
• The material is positioned at a relatively riskier place
• The interest of the insured has passed on to another person through will or operation of
law

How to make a claim?

In the event of a theft or burglary, you should immediately report the police and also notify
the home insurance provider within a period of 14 days to submit your claims for the loss or
damage sustained. Any claim notified beyond the stipulated period will be rejected by the
insurance company.