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Features of Fire Insurance

  • Author :
  • TATA AIG Team
  • Published on :
  • 18/03/2024
  • 2 min read

Fire accidents are prevalent in India. The common reasons behind this include explosions, electrical issues, man-made and natural calamities, and so on. Both businesses and homeowners have to face heavy losses in dealing with the aftermath of such incidents.

However, if you own fire insurance, you can overcome the losses and damages caused by a fire in a financially secure way. The right fire insurance policy will provide financial support to recover the losses you have incurred.

If you are planning to purchase fire insurance and are willing to understand its features and benefits, this post is for you.

In this blogpost, we will discuss the features of fire insurance along with other necessary information to help you make the right decision.

What is Fire Insurance?

Fire insurance is a type of insurance that provides financial coverage to deal with the losses and damages resulting from a fire incident. Most fire insurance policies offer coverage for a variety of assets, including buildings, machinery and equipment, furniture, personal belongings, and more.

After the occurrence of a fire accident, the policyholder can raise a claim and receive compensation from the insurance provider as per the policy terms and conditions.

Features of Fire Insurance

The nature of fire insurance is based on the principle of indemnity. It means, the insurance provider is legally bound to restore the business or a property to the same position as it was before.

When selecting the right policy, make sure to look for the following characteristics of fire insurance:

Comprehensive List of Inclusions: Insurance providers understand that fire can be caused by a variety of reasons. So, to provide you with comprehensive coverage, they offer an extensive list of inclusions.

Built-in Covers: Fire insurance policies from reliable providers come with built-in covers to help you mitigate the perils of fire accidents in the best possible way. These add-ons provide for the fees for repairers, architects, or engineers, the cost of debris removal, the cost of stock removal, and more.

Hassle-free Claims Settlement: Fire insurance policies come with a simple and straightforward claim procedure to help you rebuild your business and overcome the losses as soon as possible.

Suitable for All Businesses: Whether you are a small shop owner or running a large business facility such as a factory or shopping mall, fire insurance policies are designed to suit every need.

Benefits of Fire Insurance

Now that you have understood the functions of fire insurance, let us take a look at some of its benefits:

Offers Financial Support: A fire outbreak can lead to significant damages worth lakhs and even crores. Without fire insurance, dealing with such losses can impose a hefty financial burden on the business owners.

On the other hand, if you have a fire insurance plan, you will not have to make last moment financial arrangements by taking high-interest loans leading to debts.

One of the main objectives of fire insurance is to offer the necessary financial support to the business to recover the losses resulting from a fire incident.

Offers Coverage for Property Damage: Another benefit of fire insurance is that it offers coverage for movable as well as non-movable property along with securing other assets.

These include buildings, furniture, inventory, raw materials, finished/unfinished goods, packaging materials, and more.

Provides Economic Stability: Some incidents are just unavoidable no matter how stringent safety regulations you follow, and unforeseen fire outbreaks are no exception. Fire accidents can sometimes lead to total loss of goods.

With the right fire insurance policy, you can prevent your business from getting halted due to such mishaps. By making a fire insurance claim after a fire accident, you can get reimbursed and get your business back on track at the earliest.

What are the Inclusions and Exclusions of Fire Insurance?

The inclusions and exclusions of fire insurance vary depending on the type of policy and the offerings of insurance providers. Following are the common inclusions and exclusions offered by fire insurance plans:

Inclusions of Fire Insurance

Fire

Jungle/Bush Fire

Explosions

Thunder and Lightning

Landslides

Missile Testing Operations

Impact Damage

Riots and Strikes

Water Damage Caused by Overflowing or Bursting Water Tanks, Pipes, or Other Apparatus

Natural Calamities

Theft

Exclusions of Fire Insurance

Burning of insured property by legal order of the Government.

Fire resulting from drying or heating processes.

Explosions are caused to machinery, apparatus, boilers, or other equipment by their own implosion or explosions.

Landslides due to the use of defective construction materials, poor design, demolition ordered by legal authorities, etc.

Theft of insured articles or items that are outside the insured premises.

Who Should Buy Fire Insurance?

Fire insurance can be purchased by any business or establishment regardless of its type and size. The ideal list of fire insurance candidates includes business owners, small store owners, manufacturers, institutional property owners, or anyone who owns a property that is prone to such accidents.

Moreover, there are different types of fire insurance policies that can be purchased based on the size of the business and the coverage required.

Final Words

This is all about the benefits and functions of fire insurance. As you can see, investing in fire insurance is crucial for an all-round safety and protection of your business.

Always keep in mind that businesses are not built overnight. They are the result of years of hard work, passion, and dedication. So, do not let an unforeseen tragedy bring your business down and invest in the right business insurance.

Moreover, you can also buy our Tata AIG Fire and Burglary insurance for broader coverage for a wide range of risks such as fire, explosions, man-made and natural hazards, etc.

It is a much-needed risk mitigation tool that helps you handle the unforeseen expenses resulting from fire, theft, and other events.

FAQS

What is the scope of fire insurance?

The scope of fire insurance includes structural damage, property damage, liabilities, business operations, fees of the repair/rebuild operations, explosions, lightning, and so on. However, this scope can vary from policy to policy.

Is fire insurance expensive?

The cost of fire insurance in India is subject to varying factors such as type of policy, type of coverage, sum insured, etc.

While fire insurance can be expensive due to the relatively higher sum insured, it is totally worth the reliable financial coverage it offers.

Does fire insurance also cover theft or burglary?

Some insurance providers like Tata AIG offer Fire and Burglary insurance, while others have it as an exclusion. So, it is recommended to confirm the same with your insurance company.

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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