What are the rights and duties of insured in fire insurance?

The insured party enjoys certain rights in a fire insurance policy. These rights protect the insured from fire and related perils and ensure fair treatment and transparency. The rights of the insured in India are governed by several insurance laws and fire insurance policy conditions and terms. Let us have a look at them:

Right to Coverage

The insured has the right to ask for coverage as per the terms and conditions of the fire insurance policy. The coverage of the policy must be clearly stated specifying the damages, losses and perils covered.

Fire insurance coverage includes damage or loss caused by explosion, lightning, bushfire, natural calamities and other perils named in the policy.

Right to Policy Information

The insured has the right to access and understand the fire insurance policy. The policy’s terms and conditions, limitations and exclusions must be communicated clearly so that the insured can make a well-informed decision.

Right to Timely Claim Settlement

The insured has the right to fair and timely claim settlement in case of a covered damage or loss. The insurance provider must settle the claims in a fair manner and on time to adhere to the regulatory timeline.

**Right to Accurate Information **

The insured has the right to seek accurate information regarding the fire insurance policy from the insurance company. The insurer must furnish accurate details about the policy inclusions and exclusions to facilitate informed decisions.

Right to Dispute Resolution

The insured can seek redressal via the Insurance Ombudsman or other channels in the event of a dispute regarding claim denial or claim amount. The insurance provider must facilitate a transparent process of dispute resolution and allow the insured to present arguments and evidence.

Right to Privacy

The insured has the right to privacy when it comes to personal information shared with the insurance provider. The insurer is expected to keep the personal and sensitive information of the insured confidential at all times.

Right to Fair Premiums

The insured has the right to a fair premium depending on the risks involved in the insured property. The premium charged by the insurer should be according to the regulatory guidelines.

Right to Policy Renewal

The insured has the right to renew the policy when the policy term ends. The insurance provider must continue to renew the policy as long as the insured pays premiums and fulfils other requirements.

Just like rights, the insured is also expected to fulfil certain duties in a fire insurance contract. The duties laid in the fire insurance help in maintaining the integrity and transparency of the policy. A few duties expected to be fulfilled by the insured party are as follows:

Duty of Disclosure

The insured must furnish complete and accurate information during the application. The information should include details about the insured property and the risks involved. Providing incomplete and inaccurate information can result in the policy becoming void or claims being denied by the insurance provider.

Duty of Care

The insured must take all necessary precautions to prevent any damage or loss to the insured property due to fire and allied perils. The precautions can include following fire safety regulations, implementing fire safety measures, etc.

Duty to Pay Premiums

The insured must pay premiums in exchange for the coverage specified in the policy. Not paying premiums on time can cause the coverage to lapse and the insured will not be able to raise a claim.

Duty to Notify

The insured must promptly notify the insurance provider about a covered loss or damage due to fire or related peril. Timely notification allows the insurance company to evaluate the situation and ensures seamless and quick claim settlement.

Duty to Mitigate Loss

The insured entity is obligated to take immediate steps to mitigate additional damage or loss during a fire or related peril incident. Failure to prevent further damage can affect the compensation amount.

The steps can include using fire extinguishers, calling the fire department or other steps to stop the fire from spreading.

Duty to Preserve Proof

The insured must take all possible steps to preserve proof of fire and the resultant loss since it may help during claim settlement.

Duty to Cooperate

The insured must cooperate with the insurance provider during the claim settlement process. This includes furnishing accurate information, providing necessary documents and letting the insurance company inspect the insured property.

Duty of Good Faith

The insured is expected to act in good faith and not be involved in any scrupulous activity. Misrepresentation, fraudulent claims or concealment of information can make the policy void or lead to claim denial.

Duty to Inform About Changes

The insured is obligated to inform the insurance company about any material changes in the insured property to maintain the policy’s accuracy and transparency.

Duty to Comply with Fire Insurance Policy Conditions

The insured is obligated to follow the terms and conditions as stipulated in the fire insurance policy. These may also include specific conditions like installing sprinkler or fire alarm systems.

As a policyholder, it is essential to understand your rights and duties in a fire insurance policy. This helps in creating a harmonious relationship between both parties, avoids any misconceptions and ensures a smooth claim settlement process.

Businesses and individuals can effectively manage risks through fire insurance. It can protect you from the financial and emotional strain caused by fire and allied perils. Knowing your property and other belongings are covered against fire incidents can give you invaluable peace of mind.

An appropriate business insurance policy can help secure your property and other belongings against multiple risks. Tata AIG’s business insurance policies including fire and burglary insurance are designed for SMEs and other businesses to protect them from major losses.

What are the rights of the insurer in fire insurance?

Here’s a list of the rights of an insurer in a fire insurance policy:

Right to enter the property

Right to avoid the contract

Right of control over the property

Right to salvage

Right of subrogation

Right of reinstatement

Right of contribution

Duty of care

What are the functions of fire insurance?

The function of fire insurance is to indemnify the insured for the damage or loss caused by fire or related peril.

What does the legal right to insure means?

The legal right to insure means “Insurable Interest”. Insurable interest is a legal concept that refers to the insured party’s financial or other interest in the insurance policy’s subject matter.

In the realm of fire insurance, the concept of insurable interest implies that the insured must have a genuine financial interest in the property or other assets being covered against fire or related perils.

What is the scope of fire insurance?

Fire insurance can cover several types of properties including commercial spaces, industrial premises, residential buildings and also movable assets like equipment, machinery and furniture.

The scope of coverage includes fire, lightning, natural calamities, bush fire, leakage from automatic sprinkler installation, explosion/implosion, missile testing operations, aircraft damage and more.

What is the right of salvage in fire insurance?

In the event of damage or destruction of the insured property or goods due to fire, the insurer has the right to take possession of the salvage (property or stock saved after fire). The right of salvage in fire insurance is absolute and comes from the contract of indemnity.