Importance of Fire Insurance


 Fire causes huge losses every year. An individual by taking fire insurance can prevent the fire waste to some extent. The fire insurance is of great importance to the business field and the general public due to the following reasons:-

1. Financial Help

Business properties like factories, godowns, administrative buildings, raw materials, semi -finished goods and finished goods are exposed to risk. Fire may destroy everything ands bring the business to zero. Fire insurance gives financial help n case of any loss to the property of the insured

2 Compensation of Loss of profits

Fire not only destroys the property of business but also dislocates business. The business activity is suspended for a long time. A business is, thus, losing also the profit for this period. A fire insurance policy makes good the loss of profit of the insured for the above period.

3. Mental Security

Fire insurance gives mental security to the general public. People can get their household articles insured under various policies against the risk of fire. So, this gives them financial and mental security

4. Distribution of Risk

Insurance distributes risk among people. Premium is collected from every insured. But claims are paid only to those who have lost their property by fire. Thus, the affected party's risk is distributed to all those who have taken insurance.

5. Preventive Measures

The insurance companies advise the insured to take all possible measures to eliminate or minimise the loss.com Moreover, they stimulate the installation of protective devices by by granting soft loans. They also try to avoid fire by helping the insured for installing fire - fighting apparatus, water supply and engineering services.

6. Co-operative Device

Fire insurance is a co-operative device to share the loss. The fire insurer shifts the burden of fire losses from their actual victims over to all the members of the society. It relieves the insured from the horror of the fire losses to which he is exposed.

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