Types of fire Insurance Policies
The main types of fire insurance policies are given below:
1.Valued Policy:
The valued policy is that policy in which the value of the asset is clearly mentioned. In the event of loss, the fixed policy amount is paid either the loss is more or less. 2.
2.Unvalued Policy:
determined at the time of insurance of policy. In the event of loss, the first loss is The unvalued policy is that policy in which the value of asset is not Assessed by the insurance company and then it is paid to the policyholder.
3.Specific Policy:
In case of specific policy a specific value is given to the property insured.
When there is a loss due to fire, the company makes payment of actual loss up to the
4. Average Policy:
specific value of the assets and not more than that. In average policy, average clause is included in the contract of insurance, According to this average clause, the policyholder can get only that part of the actual loss which the insured value bears to the total value of the property.
5. Floating Policy:
Floating policy is that policy which covers the loss of several items of goods stored at different places against one premium. This policy is usually purchased by customers who have goods at different places or who frequently change the goods in their warehouses,
6. Replacement Policy:
The main purpose of such policy is to replace the assets in case of destruction due to fire. So in case of loss, payment is made at the market value of damaged asset. This policy makes it convenient to replace a new asset at the place of damaged one.
7. Comprehensive Policy:
Comprehensive policy is that policy which covers all sorts of losses to insured property like fire, accident, burglary, strikes and floods etc.
8. Loss of Profit Policy:
Sometimes the insured property or stocks catches fire and business is stopped and it loses profit for that period. The insurance company makes payment to the insured for loss of such profit on average basis. This policy is also known as consequential fire insurance policy.
9. Rent Policy:
The rent policy is issued to the owner of the building or the loss or rent due to fire. Some times building is damaged by fire and its repair take some time and owners lose the rent of that period. The Insurance Company compensates the owners of the buildings from the loss of such rent income if they have already
purchased the Rent policy.
10. Blanket Policy:
Blanket policy covers the loss of both fixed and current assets against single premium.
11. Stock Declaration Policy:
When the nature of the stock is such that great fluctuations take place in the value during the contract period, the insured can declare the value of stock on monthly basis. The 75% of the premium is paid at the time of contract and later on it is adjusted according to the declared value of stock. The maximum liability of the insurance company is specified in the Dfa Ho policy by the insured. Such policy is known as stock declaration Policy.
12. Transit Policy:
The insurance policy, which covers the loss of fire or other accidental loss during the transportation of goods, is known as Transit Policy.
