18-04-2014, 04:58 PM
Fire Insurance
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Fire Insurance is the system made to compensate the owner of the building which comes under fire
1. Fire Insurance: The owner of the building should take Fire Insurance and cover third party risk by taking Janta Policy. Janta Policy is as follows:
i) The owner or contractor should take Janta Insurance Policy so as to cover the compensation claims arising out of the Workmans Compensation Act, 1923 before starting the work and get the same revalidated from time to time.
The business of insurance involves two parties namely; the person who wants the protection called “The Insured” and the person who undertakes the risk by giving necessary protection against the laws called “The Insurer” or “Underwriter” for which he charges an agreed consideration called “The Premium”. The rights and liabilities of the parties including terms and conditions subject to which protection is afforded against the loss due to fire is reduced to a written format called “Fire Policy” or “Fire Insurance Contract”.
2. Due to nationalization of Life Insurance business in 1956 and General Insurance business in 1972, the insurers in our country will be Life Insurance Corporation for life business and General Insurance Corporation of India for general insurance. Hence insurance hereafter will be referred to as “Company/Corporation”.
3. Fire Insurance means a contract whereby one person undertakes in return for agreed consideration to indemnify another person against loss or damage occasioned by fire and/or incidental to fire upon the agreed amount.
4. The object of the contract must be indemnification of the loss caused by damage, in other words, the insurer has been imposed with an obligation to make good at his own expense any loss or damage which may have been cause by fire to the property; for indemnification means to put the insured in the very position monetarily or otherwise as if fire had not been occurred.
Essentials for formation of Fire Insurance Contract
1. Proposal must be made by the insured to the Corporation for which the Corporation will supply the printed form.
2. Deposit receipt for the payment of premium called the ‘cover note’.
3. Rejection of the proposal whereby the deposit paid as premium will be returned or on acceptance, a fire policy will be issued.
The positive and negative points to be observed while taking the policy:
1. All true facts about the structure should be disclosed to the company. Also if the policy is taken previously from another company.
2. Classification of the buildings should be done class wise with detailed specifications.
3. Plinth, foundations and ground pavements are excluded from the scope of this insurance.
4. If the crackers or fire works or other explosives are stored in the building, they should be as per Explosive Act with the licence.
Reinstatement Clause:
If the property is wholly destroyed, the company at its option may replace by its equivalent and if damaged, the company is to reinstate the damaged parts and repair them and put them in a condition in which they were before fire. The said condition further says that the reinstatement will be limited to the condition as it was before fire insurance stage.