Fire is every apparent ignition accompanied by flame and heat and arises involuntarily on the part of the risk owner and results in financial loss. From this definition, we find that there are some conditions that must be met in the fire in order for it to be considered a fire in the insurance sense. We explain all the information in the following lines.
Types of fire insurance policies in America
In the following lines, we will mention the types of fire insurance policies in America:
Friendly fire
It is the fire that is used regularly and within the limits set for it, and individuals ignite it themselves, and for example: the tar that is used in homes for cooking and heating, or the one that is used in some factories to complete some industrial operations, it leads to an increase in the value of assets and therefore is not considered a fire in the insurance sense.
Enemy fire
It is the fire that the insured does not deliberately ignite or ignite deliberately, but it goes out of the space designated for it, which leads to losses that affect the thing subject of the insurance, and it is considered a fire in the insurance sense.
It may start with a friendly fire and then turn into an enemy fire, as in the case of igniting a gas stove in homes for the purpose of cooking. In this case, the fire is considered a fire in the insurance sense.
Fire losses
Financial losses resulting from a fire accident can be divided into two main parts: direct losses, and indirect losses.
Indirect losses
They are losses that do not affect the risky asset, but result from the occurrence of the fire and affect the financial position of the owner of the risky asset, as well as civil liability towards others as a result of the fire.
These losses are not included in the insurance cover provided by the normal fire insurance policy, but can be covered either by separate documents or by appendices to the normal policy, with additional premiums paid in return.
Learn Fire Insurance in America
Non-life insurance based on compensation for fire damage. Fires used in fire insurance mean (1) that non-combustible items will burn where they should not burn from normal fire use, and (2) if left unattended, fires may expand naturally and this refers to combustion satisfying two conditions.
Recently, it is not only fire damage, but also comprehensive insurance against various perils such as compensation for damages such as theft, traffic injury, liability, etc. in response to the demands of risk diversification. He has a strong personality.
Fire insurance
In principle, it compensates for damage caused by fire, regardless of the cause, but commercial law provides for natural damage and depletion due to the inherent nature of the insurance purpose, harmful or dangerous to the policyholder or the insured.
No compensation is required for damages caused by negligence, and damages due to wars or other disturbances will not be compensated unless otherwise stated.
In addition, in actual contracts, damages from nuclear power, earthquakes, explosions, etc., which were significant at the time of the disaster and could not be borne by the private insurance company, are often excluded.
However, in recent years, the scope of these exemptions has shrunk in order to meet the demands of the times, such as compensation for damages caused by eruptions that were not guaranteed in the past. In addition to fire insurance, earthquake insurance and as a result, the company has opened a way to deal with damages such as burning and collapse caused by earthquakes and explosions.
Fire insurance applies to buildings such as homes, shops, household goods, products and machinery, such as movable property and real estate.
It can also cover indirect damages such as rent that cannot be obtained due to burning of the building, earnings during vacations, etc. The amount insured when the damage occurred is the sum insured The value of the insurance The principle of commercial law is that it is calculated by multiplying the amount of damage by (the market value of the purpose of insurance at the time of the loss).
This is called the proportional compensation method. According to this, the sum insured is less than the sum insured. Partial insurance In this case, the full amount of damage will not be paid, and it is difficult for ordinary contractors to understand it.