The term “Fire” means
a visible or glow accompanied by
heat. In fire insurance, that the term fire means actual ignition mens., : burning”: The
presences of flame is a condition pre-requisite
., Thus damage by the smoke heating, scorching of charring without actual burning , is not
consideration as “Fire”.,
Secondly the ignition has to be
fortuitous or accidental . But the this
applies only to the insured. If a third party wilfully sets fire to the insured property., it is a
still accidental so far as a insured is
concerned provided the third party is not a acting with the direct connivance of the insured.,
If they the insured himself sets fire to
the insured property, it is a certainly not accident, in fact it is a fraud., However a fire caused
by the negligence of the insured or if he is the his employees will be payable
as so long as a there is no element of
fraud.
MEANING OF FIRE INSURANCE: Fire insurance is a social device in the insurer, in return for the premium paid, undertakes to pay or make good loss
suffered by the insured as a result of a damage caused by the fire to the
property covered by the policy., It is a
offered for building or a flat furniture
, fixture, stocks and loss of
profit (consequential loss)., It is a also
covers losses the due to lightning
, aircraft, damage the losses and due to
terrorist attack, earthquake, riots, strikes, malicious damage., floods and landslide., It could be taken by
the owner of the premises to be insured., A tenant is
not eligible to insurer rented premises.
However the tenant had the options of
insuring the contents of the premises.,
The premium on the value of the property insured.,
DEFINITION
OF FIRE INSURANCE; According to
V. R. Bhushan and Prof. R. S. Sharma.,
fire insurance is an agreement
whereby one party (the insurer),
in return, for a consideration undertakes to the indemnify the other party (the insured) against
financial loss which he may sustain by reason of certain defined subject matter being damaged by the
destroyed by fire or other defined
perils up to an agreed amount., The documents ., which contains the terms and
conditions of the contract of the fire insurance is known as the policy. The
consideration for the contract of fire
insurance is termed as the premium., The
subject matter of the contract of
fire insurance is the insured property.
The sum set forth in the contract of fire insurance is called the Insured sum.
FEATURES OF FIRE INSURANCE: The following are the features of the fire insurance:. (1). A Fire insurance contract like by the
any other contract must fulfill the
essential elements of a valid contract like offer and the acceptance., lawful
consideration legality of object
etc., (2)., A fire insurance contract is a contract of indemnity., This means that in the event of loss, the
insured can recover from the insurer the
actual amount of loss or not the maximum amount for the which the subject matter is a insured whichever is less., (3).
In fire insurance, the insured should have been insurable interest in
the subject matter of the contract both in the at the time of taking the policy
and the at the time of loss., (4). Premium is a required to be paid the at the
time of taking policy., (5). Fire
insurance usually taken for any year duration but in the some cases for short
periods also., (6). Fire policies can be
assigned with the prior consent of the insurer., (7).,
The loss must be outcome of fire or ignition only., (8). Nothing can be recovered under a fire
policy if the fire is caused deliberately.,
(9). In case of several policies for the same property each insurer is
entitled to contributions from other insurers. After indemnification, the
insurer is subrogated on to the rights
and interest of the policy holders.,
SCOPE OF FIRE INSURANCE==According of section 2 of the insurance act 1938, the scope of fire insurance includes., (a). Fire insurance business is different from other insurance business operation and covers the risks caused by fire: (b) In addition to the risk cause by the fire, it also includes other reasons and occurrences,. which can be customarily be included among risk insured under fire insurance contracts., Thus we can be study the scope of fire insurance from two angles viz., (1) Ordinary scope f fire insurance and, (2), Comprehensive scope of fire insurance., 1. ORDINARY SCOPE OF FIRE INSURANCE: It includes only those risks which define the narrower scope of fire insurance viz., the losses caused by fire only. Some losses caused by the fire and are included in the insurance against fire and some losses are left out. (A)., RISKS COVERED UNDER FIRE INSURANCE: The risk causing losses have to be stated in the fire policy and only these risks are indemnify are by the insurance company., in case of the loss., The following risks caused by the fire are generally included in the fire insurance., (a) Fire or ignition: (b)., Blasting of boiler used for household cooking., ( C ) Blast of gas etc,. used for the purpose of lightning and heating in any building (not being an industrial concern or factory using gas for purpose other than lighting and heating)., Above mention blasts causing fire must be uncertain and accidental., (B) RISKS NOT COVERED BY FIRE INSURANCE: There are certain risks for the which insurer do not indemnify the insured in case of loss., They are as following ., (a). Loss, durations, damage to precious stones and metal artistic goods and article ,maps., stamps., cheques., account. books archieves and rate documents etc., (b)., Loss, destruction or damage caused by riot., civil disturbances , revolutions , war, aggression, internal emergencies, storms, cyclones., etc., ( C ). Spontaneous fire in jungle or bushes., (d). Spontaneous combustion caused by the chemicals., (e) Theft during fire or after break out the of fire., (f). Compulsory burning of goods are or properties by the orders of Government or court’s decision.
COMPREHENSIVE SCOPE OF FIRE INSURANCE: Numerous fire
policies have been introduced to cover
various types of the risks allied to the risks of fire. Coverage of such risks
under the ambit of the fire insurance
has been widened the scope of fire insurance. Some special policies have helped in a great way in broadening the scope of
fire insurance in the following manner:
(A). By including the included perils and risks: (B).
By including consequential losses
and the other indirect fire risks., In the first category such excluded
risks, which cannot be insured under general insurance
schemes., have been brought under the
cover the of fire insurance. Such policies
are called special insurance
relating to spontaneous combustion earthquake blasts., etc., In the second category the indirect
risks or losses are covered. Such risks are or losses are also know as par consequential risks or losses. Expenses after at the
fire rehabilitation, expenses of the burnt factory, expenses of reorganizing
the proper production etc., are some of
the examples or such risks or losses. Such risks have been
through brought under the cover of fire
insurance. Generally insurance.
Generally consequential loss insurance
and profit and loss insurance policies cover such indirect risks.,
HAZARDS IN FIRE INSURANCE: Fire
loss is the result of two types of hazard:
(1). PHYSICAL HAZARDS: It refers to the inherent risk of the fire in the property which may be
on account of the situation, inflammable nature, constructions artificial
lighting and heating, lack of the fire
extinguishing is a appliances,
etc., Fire insurance, providers
protections to the property against the occurrence of fire, an unavoidable
physical hazard. (2). MORAL HAZARD: The term Moral Hazard
refers to the wilful and melicious setting on fire of on the
property by the owners or some body else. Moral hazard may be in
anyone of the following forms: (a) IN
CENDIARISM: It refers to the deliberate
destruction of one’s own property by fire. Some insured indulge in such activities to realize the insured amount from the
insurer. (b). ARSON: It refers to setting on fire the property of the
insured by the some other persons. Some persons may set fire to property of
others with a view to getting a reward for information about the break out of the fire or
assisting in extinguishing it. ( C ).
PASSIVE DISHONESTY: It refers to the
wilful neglect to the by the insured to take proper action for
extinguishing fire and his
carelessness during the occurrence of
fire