Let us understand the fire insurance meaning and why is it a wise choice. Here are some of the features of fire insurance that indicate why you should purchase it.

• Protection against any loss or damage caused due to any movable or immovable object that turns into a fiery explosion.
• A fire policy covers property damage such as furnishings, office building, machinery, stock, etc. due to a fire accident.
• Besides, fire perils, a burglary insurance policy also provides coverage for the damages caused due to any natural calamity, explosion, bursting of the water tank, etc.

Types of Fire Insurance in India

Here are the types of fire insurance policies in India that you can purchase:

1. Bharat Sookshma Udyam Suraksha: This policy provides coverage for the loss or damage caused to the building, property, plant & machinery, stocks and other assets for a sum insured up to Rs. 5 Crores.
2. Bharat Laghu Udyam Suraksha: This policy provides coverage for the damage or destruction caused to the building, plant & machinery, stocks and other assets for a sum insured between Rs 5 Crores and Rs 50 Crores
3. Special Fire & Special Perils: This is a type of fire insurance contract between the insurer and insured that provides coverage for the loss or damage caused to the building, plan & machinery, stock and other assets for a sum insured exceeding Rs 50 Crores.

There are 5 types of policies specifically under Special Fire & Special Perils insurance (SFSP). They are as follows:

• Specific Policy: A specified sum insured is determined for a particular property and in case of loss the actual loss does not exceed the chosen insured amount
• Comprehensive Policy: This policy provides extensive coverage not only against fire related perils but also provides coverage against any other perils, such as robbery, burglary, civil rampage, etc.
• Valued Policy: At the intimation of the policy, the value of a particular property is determined. Instead of the current market value, the indemnity of the policy is determined which is based on the value of the property. So, the agreed value at the time of purchase is the deciding factor of policy indemnity here.
• Floating Policy: If you deal with fluctuating stocks in different areas. This policy provides coverage for one or more goods at the same time under one premium and one sum assured.
• Valuable Policy: The claim amount is decided according to the current market price of the damaged property.

The following are the characteristics of a fire insurance policy, which make it a unique product to others. Let us understand the characteristics, which should not be ignored:

• One-year Policy: The term fire insurance policy is generally for a year but it can be renewed depending on the terms and conditions mentioned in the policy schedule.
• Insurable Interest: The policy is valid when the insured has an insurable interest in the insured property. In case a loss occurs, such interest may be required. This is beneficial to the insured by the survival of the insured property and under a situation of destruction may face a loss as well.
• Direct Loss: If the root cause of the loss or damage is fire, one may avail of this.
• Personal Right: In case of any loss/damage under any unfortunate circumstances, the insured amount will be provided to the person whose name is mentioned in the policy document.
• Personal Insurance Contract: The policy requires complete transparency. The insured must know the insured’s behavior. Also, the insured can only transfer the policy with the consent of the insurer only and the insurer has the right to terminate the policy if their possession of goods is transferred to a third-party.
• Property Description: While buying a fire insurance policy it is imperative to give a proper account of the possession. This is essential because as per the location addressed in the document of the policy, the claims will be settled if in case any unfortunate event occurs at the insured place. In case if there is any change, it needs to be brought to the notice of the insurer to avoid further upshot.