With more and more people opting for a luxurious lifestyle, as a result becoming gadget freaks, the risk of facing a crisis situation i.e. fire accidents have increased considerably. In such circumstances, the best bet would be to get your house and commodities secured and insured. One such policy is the home fire insurance policy, also called Standard Fire and Special Perils Policy, the bulwark against such potential perils. It offers protection against the risk of loss or damage due to fire or special perils. The policy pays for the actual cost of repairs, replacement or setting up of the item lost or damaged. However, claim settlements are subject to the market value of the property damaged, at the time of loss, upon an overall limit of the sum insured opted. If the individual value of assets is not furnished, the value of each property is considered as not more than 5% of the total sum insured. Know more about the types of fire insurance policy, the documents required and what is covered in these policies.
Types of Fire Insurance Policy
In this type of policy, the insurance company is liable to pay a sum, which may be less than the property's real value. The insured is called to bear a part of the loss, as the actual value of the property is not considered in deciding the amount of indemnity. This is a case of under-insurance of property.
Known as "all-in-one" policy, the insurance company indemnifies the policyholder for loss arising out of fire, burglary, theft and third party risks. In this type of policy, the policyholder also gets paid for loss of profits incurred, due to fire, till the time the business remains shut.
In this type of policy, the value of the commodity is already set and actual loss is not taken into consideration. The policy follows a standard contract of indemnity, wherein the policyholder gets paid a specific amount of indemnity, without considering the actual loss.
This type of policy is subject to average clause and the extent of coverage expands to different properties, belonging to the policyholder, under the same contract and one premium. The floating policy also provides protection of goods kept at two different stores.
Replacement or Re-instatement Policy
As per replacement or re-instatement policy, the insurance company instead of paying the policyholder the amount of indemnity in cash, replaces the damaged property/commodity with a new one.
Documents Required for Fire Insurance Claim