Salient Feature

Fire policy is location oriented – property is covered at stated location only. Any one who gains by the preservation of the property and loses by its destruction i.e. a person having insurable interest can take out such insurance.

i)              Individuals e.g. House owner, Shop owner, Warehouse owner etc.

ii)             Body Corporate e.g. Manufactures, Trading, Industry etc.

iii)            Financial institutions that have advanced loans against the property

iv)            Bailees / Bailers

v)             Lessor / Lessee

vi)            Mortgagors / Mortgagees

vii)           Trustees

The policy is for the following:

i)              Buildings

ii)             Plant and machinery

iii)            Furniture, fixtures and fittings

iv)            Electrical installations

v)             Stocks of raw materials

vi)            Other contents

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Scope of Cover

The policy provides protection against damages/fortuities triggered by the following perils:

i)              Fire - Excluding destruction or damage caused to the property insured by

a.     its own fermentation, natural heating or spontaneous  combustion.

b.     its undergoing any heating or drying process.

ii)             Lightning

iii)            Explosion/Implosion

iv)            Excluding destruction or damage caused to the boilers (other than domestic boilers),  by its own explosion/implosion

v)             Aircraft Damage

vi)            Destruction or damage caused by Aircraft, other aerial or space devices and articles dropped there from excluding those caused by pressure waves

vii)           Riot, Strike, and Malicious Damage

viii)          Loss of or visible physical damage or destruction by external violent means directly caused to the property insured

ix)            Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation

x)             Impact Damage

xi)            Impact by any Rail/Road vehicle or animal by direct contact

xii)           Subsidence and Landslide including Rock slide

xii)           Bursting and/or overflowing of Water tanks, Apparatus and Pipes

xiii)          Missile Testing operations

xiv)          Leakage from Automatic Sprinkler Installations

xv)           Bush Fire

Terrorism is an add-on cover.

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Exclusions

i)              5% of each and every claim resulting from the operation of Lightning. STFI (Storm, Tempest, Flood and Inundation) and Subsidence & Landslide including Rockslide covered under this Policy.

ii)             Loss, destruction or damage caused by war.

iii)            Loss, destruction or damage directly or indirectly caused to the property insured by nuclear forms.

iv)            Loss, destruction or damage caused to the insured property by pollution or contamination.

v)             Loss, destruction or damage to bullion or unset precious stones, any curios or works of art for small amount exceeding Rs.10000/-, manuscripts, plans, etc.

vi)            Loss, destruction or damage to the stocks in Cold Storage premises caused by change of temperature.

vii)           Loss, destruction or damage to any electrical and/or electronic machine, apparatus, fixture or fitting (excluding fans and electrical wiring in dwellings) arising from or occasioned by over   running, excessive pressure, short circuiting, arcing, self-heating, or leakage of electricity, from whatever cause (lightning included)

viii)          Expenses necessarily, incurred on

a      Architects, Surveyors and Consulting Engineer’ Fees and

b      Debris Removal by the Insured following a loss, destruction or damage to the property

                        insured by an insured peril in excess of 3% and 1% of the claim amount respectively.

ix)            Loss of earnings, loss by delay, loss of market or other consequential or indirect loss or damage of any kind or description whatsoever.

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Duration of Cover

i)              Fire Policies are generally issued for one year. However, as per the option of the insured, policy may be issued for shorter period than one year.

ii)             Long term policies are issued for the “Dwellings” i.e., for the house/flat owners subject to certain conditions.

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Sum Insured

BASIS OF SUM INSURED  (Standard to be adopted for valuation of assets proposed for Fire Insurance)

a.     REINSTATEMENT VALUE BASIS

                      I.        Present cost of replacement (No depreciation is applied)

b.     MARKET VALUE BASIS

                      I.        For Capital Asset – Present cost less depreciation for age & / or  usage

                     II.        For Current Asset – The cost at which it is available in the market

                    III.        Original Cost – It is inadequate for insurance except when new

                    IV.        Book Value – Original Cost less depreciation for the age 7 / or usage. Not considered in insurance

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Pricing/Excess

The rates for Fire Insurance are practically one of the lowest in all Branches of Insurance and therefore always expressed in per mille and as prescribed in the ALL INDIA FIRE TARIFF brought out by the TARIFF ADVISORY COMMITTEE less 25% or our discounted guideline rates which ever is lower.

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Basis Of Indemnity

In case of a loss/damage the following two broad categories of assessment can be done.

i)              In case of Partial Loss – The insurers pay for the repair cost, freight and Insurance to and the repair workshop, dismantling and re-erection charges.  In case of in house repair a reasonable amount of overheads is paid for.

ii)             In case of total loss – the Insurers pay for the new replacement cost of identical machine of the same capacity and   model.  This gives the Gross Loss.

Thereafter the Net loss is computed as hereunder:

GROSS LOSS

Less       Depreciation (to be considered only in case S.I. is fixed on Market value basis)

Less       Salvage

Less       Under Insurance

Less       Excess

 =             Net Claim payable

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