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STANDARD FIRE POLICY :fire: (CLAUSES AND EXTENSIONS FIRE INSURANCE RATING…
STANDARD FIRE POLICY :fire:
policy value is based on property actual value
product of property insurance covering damage and losses caused by fire
Renew Once a Year
WHAT SHOULD
HAVE IN THE POLICY ?
2)BODY PART
Operative clause
is the clause in an insurance policy details the type of event insured against.
•Conditions •Warranties •Exclusions •Specialties •Endorsement
1)PREAMBLE PART
•Insurer’s name •Address of registered office •Recital clause
3)CLOSING PART
Attestation clause
•This clause provides for the signature on the policy. The policy is signed by the authorized official of the insurer.
•The agreement have been tied up by two parties.
•Both party who come to the contract that are agreed to bind the agreement
SCOPE OF COVER
LIGHTNING
FIRE
EXPLOSION
DEFINITION OF
INSURED PERILS
Insured perils is a source of damage/loss which covered by insurance policy
SITUATION that must present before the insurance company will pay out any claims to the insured parties
DEFINITION OF EXCLUDE PERILS
Insurance Company Does Not Bear The Responsibility Of Providing Financial Relief
Eliminates Coverage For Certain Acts, Property, Types Of Damage Or Location
ADDITIONAL PERILS
Perils that can be added to
standard policy to widen its scope
Perils that not be stated in the
policy but can be requested with an
additional premium
PROPERTY COVERED
A fire insurance policy covers all properties either it moveable or immovable, against various perils
1)BUILDING - Dwelling, factories, and offices
2)STOCKS - Raw Materials, packaging Materials
3)CONTENTS - Plants And Machinery, Furniture, Fittings And Fixture
PROPERTY EXCLUDED
1)Precious Stone Unless These Items
Are Stock - Furs, Jewelry, Gold, Silver, Platinum
2)Money - Any type of Currency, Cheque, Money Order
3)Glass - Unless It Directly Damages By Insured Peril
4)AnimalsIn The Building - Other Than Stock
PROXIMATE CAUSE
Proximate
is nearly accurate so proximate cause is key principle of insurance and is concerned with how the loss or damage actually occurred and whether it is indeed as a result of an insured peril
proximate cause > peril > -insured peril
-uninsured peril
-excluded peril
BASIS ADEQUENCY
OF SUM INSURED
SUM INSURED > Premium payable for the Insurance Policy
-Insurer’s maximum liability under the policy. Insurer’s maximum liability under the policy.
-A limit of the Insurer’s liability and a basis on which the premium is calculated
-The maximum amount that insurance company will pay in the event of our house is destroyed or damage
SUM INSURED
FIRE TARIFF
QUOTATION
that determine the premium
rates which insurance companies can
charge consumers for insurance
products sold by them
CHARGED BASED ON:
-LOCATION
-OCCUPATION
-CONSTRUCTION
MARKET VALUE
Cost of construction of building should be taken and
then the depreciation for age and usage deducted.
SUM INSURED=MARKET VALUE
REINSTATEMENT VALUE
The basis of loss settlement is the value of new property without taking any depreciation into account.
It enables the owner to replace his property without any financial strain on his own resources and is quite commonly taken by industrialists and building owners.
DAY ONE BASIS
Declared as at the first day of the insurance.
Economical and safe ways to avoid under insurance
POLICY CONDITIONS
Condition policy
is a condition of what the
insured ought or ought not to do that
had been stated by insurer.
Payment of premium
-The policyholder must ensure that the premium is paid well in advance so that the risk can be covered.
-For an example, if the payment is made through cheque and it is dishonored then the coverage of risk will not exist.
Contract of Indemnity
-Indemnity can be defined as a security against loss or damage.
-The concept of indemnity is based on a contractual agreement made between two parties, in which one party agrees to pay for potential losses or damages caused by the other party. losses or damages caused by the other party.
-Fire insurance is a contract of indemnity and the insurance company is liable only to the extent of actual loss suffered.
-If there is no loss, there is no liability even if there is fire.
Utmost Good Faith
-The policyholder must disclose all the relevant information to the insurance company while insuring their property.
-The fire policy shall be voidable in the event of misrepresentation, misdescription or non-disclosure of any material information.
-Misrepresentation is a fact of something which is untrue, misdescription-refers to an inaccurate physical or legal descriptions of property in contract and non-disclosure is occurs when one party to the contracts fails to disclose a fact that is considered material
Insurable Interest
-The fire insurance will be valid only if the person who is insuring the property is owner or having insurable interest in that property. -Such interest must exist at the time when loss occurs.
Contribution
-If a person insured his property with two insurance companies, then in case of fire loss both the insurance companies will pay the loss to the owner proportionately.
Period of fire insurance
-The period of fire insurance will not exceed by one year.
-The period can be less than one year but not more than one year except for the residential houses which can be insured for the period exceeding one year.
Deliberate Act
-If a property is damaged or loss occurs due to fire because of deliberate act of the policyholder, then that damage or loss will not be covered under the policy.
Claims
-To get the compensation under fire insurance, the insured must inform the insurance company immediately so that the insurance company can take necessary steps to determine the loss.
Offer and acceptance
-It is a prerequisite to any contract.
-The property will be insured under fire insurance policy after the offer and acceptance had been done.
-The fire insurance is formed when there is an offer made by one party and that offer is accepted by the other party.
CLAUSES AND EXTENSIONS FIRE
INSURANCE RATING
DEFINITION
: PROVISION IN AN INSURANCE POLICY THAT STIPULATES THE RISKS ASSUMED BY THE INSURER
IMPORTANCES
:
-Understand the scope of the cover.
-Accept and comply with any obligations or restrictions that the clause imposes.
Policyholder must complied with the orders to satisfy the clause.
ENDORSEMENT
:
•Changes in the policy that initiate by the policyholder.
•If a person thinks that they cannot afford paying for the premium of a policy but still wishes to maintain it, they can modify it by way of an endorsement. They might ask the insured to lower the cost of risk coverage. In return, the insurer will now charge for a lower premium.
WARRANTIES
:
•An undertaking by the insured to the insurers that he will ( or will not) do a certain thing, or that certain facts are stated
EXTENSION
DEFINITION:
•Extension insurance needs to cater for both the existing elements of theproperty that’s being extendedand all the new extension works that go into the process.
PURPOSES:
•Estimated maximum loss
•Help the insured to economies with premiu
Additional perils insurance
Flood
Vehicle
Electrical damage
Riot Or Civil Commotion
Explosion
Aircraft