FIRE INSURANCE


Fire insurance does not have a long history. It came into existence after the Great Fire of London in 1666. This fire lasted for four days and four nights from 2 to 5 September, 1666. Almost 80 percent of the city was destroyed. This incident sowed the seeds of fire insurance as we know it now. Fire insurance business in India is governed by the All India Fire Tariff, 2001, that lays down the terms of coverage, the fl premium rates and the conditions of the Fire Policy.

Meaning

A fire insurance is an agreement between the insurer and the insured, under which the insurer agrees to indemnify the loss caused by fire, to the insured, in consideration of certain payment called premium

It is a device to compensate the insured for the loss caused by fire. In fire insurance, the insurer distributes the burden of fire losses to all the members of the insurance community. It relieves the insured from the risks of loss caused by fire. The insurer will pay only the actual amount of loss, or the maximum amount specified in the contract, whichever is less. In short, in the event of loss, the insured will only be indemnified.

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