Tafsir Ahmed

Md. Tuhin Hossain

Md. Najmul Hossain

Nipa Acharjee

Zannatun Tazry

Mustafa Al Maruf

18156

18143

18149

18126

18190

18157

Insurance that is used to cover damage to a property caused by fire. Fire insurance is a specialized form of insurance beyond property insurance, and is designed to cover the cost of replacement, reconstruction or repair beyond what is covered by the property insurance policy.

The real establishment of fire insurance came only after the Great Fire of London in 1066. This fire lasted for four days and nights burning over 436 acres of ground and destroying over 13,000 buildings was the most disastrous fire in history and forcibly awakened the people to the necessity for a form of protection against such calamities.

Fire Lightening Explosion/Implosion Air craft Damage Riot, Strike, Malicious & Terrorism Damage Bush Fire Storm, Cyclone, Hurricane, Flood etc Impact Damage Subsidence & Landslide Bursting/ Overflowing of Tanks & Pipes Missile Testing Operation

 War Invasion Civil war Revolution Rebellion Military power Usurped power

Insurrection Mutiny Popular rising Act of enemy  Typhoon Hurricane  Tornado

Explosion Impact by vehicle Articles dropped

from Aircraft Hail & Thunderstorm Earthquake Spontaneous

Combustion, heating or fermentation

Malicious Damage

Civil Commotion Subterranean fire Subsidence &

Landslide Horses &Cattle Bursting of pipes or

apparatus

Fire insurance contract may be defined as "an agreement, whereby one party in return for a consideration undertakes to indemnify the other party against financial loss which the latter may sustain by reason of certain defined subject-matter being damaged or destroyed by fire or other defined perils up to an agreed amount."

The party responsible to indemnify the loss is called the insurer,

The party who is to be indemnified is called the insured,

The consideration for the contract is termed 'the premium',

The defined subject-matter is termed 'the property insured"

The sum set forth in the contract is called the assured sum, and

The document containing the terms and conditions of the contract is known as 'the policy.

Any loss caused by fire lighted purposively is not a loss by fire if it was intentional. However, the property burned accidentally in an ordinary fire, such as domestic fire, the loss is covered even if the fire remains under control.

When a fire was purposively lighted but became out of control at a later stage is taken under the definition of fire. The object of fire insurance is to indemnify the insured against accidental loss by fire.

Features of General Contract• Proposal• Acceptance• Commencement of risk• Cover note

Insurable interest Principle of Good

Faith Principle of

indemnity Subrogation Warranties Proximate cause

The insurable interest is the pecuniary interest where by the policy holder is benefited by the existence of the subject matter and is prejudiced death or damage of the subject matter.

The contract of fire insurance is one in which the observance the utmost good faith- by both the parties are of vital significant. The utmost good faith in fire insurance has two aspects-first, disclosure of material facts and second, preservation of the property insured.

The doctrine of indemnity aims to compensate the insured for a loss sustained, and the compensation should be such as to place him as nearly as possible in the same pecuniary position after the loss as he occupied immediately before the occurrence. The insured cannot claim anything in excess of the amount required to recoup the actual loss sustained.

The doctrine of Subrogation refers to the right of the insurer to stand in the place of the insured, after settlement of claim, in so far as the insured’s right of recovery from a third party due to whose negligence the loss may happened.

There are certain conditions and promises in the insurance contract, which are called warranties. On breach of warranties the insurer become free from his liability. Therefore the insured must have to fulfill the conditions and promises during the insurance contract.

Proximate cause means the active efficient cause that sets in motion a train of events which brings about a result , without intervention of any force started and working actively from a new an independent source.

Valued policy Unvalued policy Specific policy Average policy Floating policy Stock declaration policy Loss of profit policy Standard fire policy Reinstatement policy Schedule Policy

This is a type of fire insurance policy where the value of the subject-matter of insurance is agreed upon at the time of making the contract. The insurer is liable to pay the amount specified or valued irrespective of the amount of loss caused due to fire. In this policy the principles of indemnity has no application. The insurer pays a fixed sum and does not indemnify for the losses. Valued policy is taken for those goods whose value becomes difficult to calculate in case of loss by fire. This type of policies are suitable for insuring works of art, jewelry and paintings where the value of the damaged articles becomes difficult to measure.

Valuable policy is a type of policy where the amount of loss is not valued at the time of undertaking contract of insurance. It is determined at the time and place of loss on the basis of market value of the property. It is generally based on the basis of principle of indemnity.

A specific policy is a type of policy in which the property is insured for a specific sum irrespective of its value. The value of the whole subject matter is immaterial and as such it becomes a under insurance policy. For example, if a property is insured for Rs. 10000 though its actual value is Rs. 20000. In the event of loss to property, not more than Rs. 10000 can be recovered.

It is a type of policy where the average clause is inserted. Under this policy the indemnity is determined on the basis of the value of the property insured. In average policy under insurance contracts are penalized. If a policy is taken for Rs. 10000 against a real value of the property Rs. 50000. The loss is 800. The claim for the loss will be restricted to the proportionate of sum assured to the actual value of the property.

Floating policy is taken out for those goods which are frequently changing in a warehouse. This policy can be taken on those goods which are lying on different localities or go downs Since quantity of goods lying in the warehouse or at different places fluctuate from time to time, it becomes difficult for the owner to take a specific policy. Floating policies are suitable to those traders or products whose raw-materials or merchandise are lying at different localities or go downs.

It is a type of fire policy where all types of risks like fire, burglary, riot, explosion and strikes are covered. This policy is otherwise called as all in one policy or all Insurance policy. Since this type of policy covers a wide range of perils, these are very popular in England.

The actual process of rating consists of three steps:

Classification, Discrimination and Fixing rates or schedule rating.

Different premium rates are fixed for each class. These classifications do not hold good for a long time because of varied nature of risk. Now the risks are classified into various classes according to factors affecting fire risk.

Construction or Structure Occupancy Nature of Flooring Height Floor and wall opening Exposure Lighting, Heating and Power

The differentiation of the rates for individual risks in a particular class is known as discrimination. Each additional feature of risk is charged extra premium. The better types of risks are encouraged and attracted by the insurer. Lesser premium is charged where fire extinguishing appliances or fire-resisting construction are present.

It is a plan by which hazards with respect to any particular risk are measured. It is defined as," an empirical standard for the measurement of relative quantity of fire hazard.

Moral hazard Legal frameworks Regulatory bodies and processes Competition Skills and training Market initiatives Bad faith Disputes over the amount of coverage Disputes about the extent of coverage

available Improper or wrongful claim denials Adverse selection Fire protection expensive

For the Year 2010

This insurance does not cover:1. Loss by theft during or after the occurrence of a

fire.2. Loss or damage to property occasioned by its own

fermentation natural heating or spontaneous combustion or by its undergoing any heating or drying processes.

3. Loss of damage occasioned by or through of in consequence of;

The burning of property by order of any public authority

Subterranean fire.

The insurance does not cover any loss or damage occasioned by or through or in consequence directly or indirectly of any of the following occurrences, namely

Earthquake Typhoon War, invasion Mutiny, riot, military or popular rising.

After knowing the brief history, types, perils associated, advantages, barriers and precautions of fire insurance we conclude that There is no way to face the risks of fire or to completely eliminate the factors of fire but we can be saved from the damages associated from fire through insurance. Fire insurance is a key to cover losses caused by fire. It cannot bring back your dear ones but try to overcome or to fill the spaces in the life of the heirs.