Fire Insurance: Types of Fire Insurance in India
A fire at home or in the office can cause serious damage. But if you’re covered under fire insurance, you don’t have to worry about the loss that happened to your building. Insurance companies provide different types of fire insurance to policyholders. Read on to find out the details!
What is Fire Insurance?
Fire insurance is a type of general insurance that financially protects you against loss or damage that happens due to fire. The policyholders can claim for repair expenses, reconstruction costs, and replacement costs. Besides this, fire insurance also provides coverage for property damage that happens due to theft, burglary, or a natural calamity.
Different Types of Fire Insurance
Many insurance companies in India provide fire insurance policy coverage. The policyholders can choose between different types of fire insurance to avoid mishaps.
Fire Insurance for Fixed Assets
There are two fire insurance Policy types for fixed assets like property, plants, or furniture. These kinds of fire insurance policies includes:
- Replacement Value Policy: In this type of fire insurance, an insurance company bears the cost of replacing the damaged asset. The replacement value is determined based on the market value of the asset minus its depreciation. Additionally, the insurance company will cover the property's construction costs if your fixed asset is insured.
- Reinstatement Value Policy: This is an additional benefit available under the replacement value policy. In this type of policy, the insurance company covers the replacement cost of the damaged property until it gets back to its original condition. This benefit is only applicable to fixed assets like buildings.
Fire Insurance for Non-Fixed Assets
You can choose from different types of fire insurance to insure your non-fixed assets against fire. Some of them are mentioned below:
- Floater Policy: You can opt for this policy if your assets are located at different locations. Therefore, you can cover all your assets under a single fire insurance plan and get coverage on a floater basis. An insurance company may ask you for details like the location of the asset and its value to provide coverage against fire.
- Specific Policy: Under this type of fire insurance, coverage is provided up to a specific sum assured. The sum assured is lower than the actual value of the asset.
- Comprehensive Policy: This is one of the best types of fire insurance. It provides coverage against a maximum number of perils that may happen to your non-fixed assets.
- Valued Policy: In this type of fire insurance, the value of a particular asset is determined at the time of policy indemnity. Henceforth, the indemnity amount is calculated based on the actual value of the property but not on its current market value.
- Valuable Policy: Unlike a valued policy, the claim amount in valuable fire insurance is determined based on the current market value of the damaged property.
Why Should You Buy Fire Insurance?
The importance of investing in fire insurance is highlighted in the section below:
- Fire insurance will ensure that you are financially covered in case of any mishaps. This means an insurance company will bear the hefty repair or damage costs incurred due to a fire.
- During these uncertain times, fire insurance will provide you with peace of mind. You would not have to worry about loss or damage to your property.
- Besides damage from fire, it also protects you from other listed perils like theft, burglary, natural calamities, and others.
Wrap Up
In conclusion, fire insurance is a financial cushion that provides coverage against damage caused by fire and other perils. Some of the best insurance companies in India provide different types of fire insurance plans.
