Fire Insurance policy Under Indian Insurance Law

Fire Insurance policy Under Indian Insurance Law

An insurance contract occurs when a person seeking insurance protection enters into a contract with the insurer will compensate for the loss of property by or incidental to fire and electric apparatus, explosion, etc. This is primarily a contract and at Thus, as governed by the general law of contract. However, it has some special features such as insurance transactions, such great faith, insurable interest, indemnity, subrogation and contribution, etc. these principles are common to all insurance contracts and are governed by special principles of law.

FIRE INSURANCE:

According to S. 2 (6A), "fire insurance business" means the business carried out otherwise than incidentally to some other class of insurance business, contracts of insurance against loss by or incidental to fire or other event, usually included among the risks insured in the fire insurance business.

According to Halsbury, is an insurance contract whereby the insurer agrees for consideration to indemnify the insured to some extent, and subject to certain terms and conditions against loss or damage by fire, what could happen to the property of insured for a specific period.
Thus, fire insurance is a contract whereby the person seeking insurance protection enters a contract with the insurer will compensate for the loss of property by or incidental to fire or lightning, explosion, etc. This policy is designed to ensure the property of both items damage losses occur due to complete or partial by fire.

In its strictest sense, an insurance contract is a fire:

1. Whose principle object is insurance against loss or damage by fire.

. 2 degree of liability of the insurer is limited by the sum insured and not necessarily by the magnitude of the loss or damage suffered by the insured, and

March. Insurer which has no interest in the safety or destruction of the insured property, apart from the liability undertaken under the contract.

FIRE INSURANCE LAW GOVERNING

There is no sure fire promulgation of legal government, as in the case of marine insurance which is regulated by the Marine Insurance Act of India 1963. The Insurance Act of India, 1938 is primarily related to the regulation of insurance business as such and not with any general or special law principles relating to the fire of the other insurance contracts. So in the absence of any legislation on the matter, the Indian courts have in dealing with the topic of fire insurance have relied so far on judicial decisions of the courts and the opinions of the English Law Insurance Business (Nationalisation) Act, 1872. Jurists.

To determine the value of property damaged or destroyed by fire in order for compensation under a fire insurance policy, which was the value of the insured property, which was to be measured. Prima facie that the reference value is measured by the market value of the property before and after the loss. However, these methods of assessment did not apply in cases where the market value does not represent the actual value of the property insured, as the property was used by the insured as a home or for conducting business. In such cases, the extent of damages was the cost of recovery. In the case of Lucas v New Zealand Insurance Co. Ltd. [1] in which the insured property was purchased and held as an investment that produces income, and therefore, the court held that the proper measure of damages for property damage by fire was the replacement cost.

Insurable interest

A person who is so interested in a property that has benefits of its existence and prejudice by its destruction is said to have an insurable interest in that property. Such a person can insure the property against fire.

The ownership interest must exist both at the start and at the time of loss. If not there at the start of the contract can not be the object of the insurance and if not at the time of the loss, which does not suffer the loss and no need for compensation. Therefore, selling the property insured and is damaged by fire after that, he does not suffer any loss.

RISKS COVERED UNDER FIRE INSURANCE

The date of conclusion of an insurance contract is the issue of the policy is different from the acceptance or risk taking. Section 64-VB only lays down broadly that the insurer can not take the risk before the date of receipt of the premium. Rule 58 of the Rules of Insurance, 1939 speech in advance of premiums in view of the secondary (!) Of Section 64 Section VB, which allows the insurer to assume the risk of later date. If the proponent did not want a particular date, it was possible that the proponent to negotiate with the insurance of that term. Precisely therefore, the Apex Court has said that final acceptance is the holder or the insurer depends simply on how the negotiations have progressed insurance. Although the following are the risks which seem to have covered a fire insurance policy, but they are not fully covered by the Policy. Some contentious areas are as follows:

FIRE: Destruction or damage to property insured by its own fermentation, natural heating or spontaneous combustion or its undergoing any heating process or drying can not be treated as damage due to fire. For example, paint or chemicals in a factory undergoing heat treatment and consequently damaged by fire is not covered. In addition, burning of property insured by a public authority is excluded from the scope of coverage.

LIGHTNING: Lightning may cause a fire or other damage, such as a roof broken by a falling chimney struck by lightning or cracks in a building due to a lightning strike. Both fire and other damage caused by lightning are covered by the policy.

AIRCRAFT DAMAGE: Loss or damage to property (by fire or otherwise) directly caused by aircraft and other devices and / or air articles dropped there from is covered. However, loss or damage resulting from pressure waves caused by aircraft traveling at supersonic speed, are excluded from the scope of the policy.

Riots, strikes, malicious damage and terrorism: The act of any person taking part together with others in any disturbance of the public peace (not war, invasion, riot, civil commotion, etc.) is interpreted as a riot, strike or terrorist activity. Unlawful action would not be covered by the policy.

Storm, cyclone, typhoon, tempest, hurricane, tornado, flood and inundation: the storm, cyclone, typhoon, tempest, Tornado and Hurricane are the different types of violent natural disturbances are accompanied by thunder and strong winds and heavy rains. Flood or flooding occurs when water rises to an abnormal level. Flood or flooding not only be understood in the common sense of the terms, ie, floods in the river or lake, but also the accumulation of water due to choke drains are considered flooding.

Impact damage: the impact of any vehicle of rail / road or animal by direct contact with the insured property is covered. However, such vehicles or animals should not belong to, or owned by the insured or any occupier of the premises or its employees while acting in the course of their duties.

Sinking and INCULUDING ROCKSIDE LANDSLIDE: Destruction or damage caused by the collapse of part of the site on which the property or Landslide / Rockslide is covered is located. While mean subsidence subsidence or building at a lower level, Landslide means sliding down of land usually on a hill.

However, the normal cracking, settlement or bedding down of new structures; settlement or movement of made up ground; coastal or river erosion; defective design or workmanship or use of defective materials; and demolition, construction, alteration or repair of any property or ground-works or structural excavation, are not covered.

BURSTING AND / OR overflow of water tanks, apparatus and pipes: Loss or damage caused by water or otherwise because of breakage or accidental overflow of water tanks, apparatus and pipes are covered.

MISSILE TEST OPERATIONS: Destruction or damage due to the impact or otherwise of the trajectory / projectiles regarding missile test operations by the Insured or any other person who is covered.

LEAK sprinkler INSTALLATIONS: Damage caused by water discharged or accidentally leaked out of the automatic sprinkler installations in the premises of the insured, is covered. However, destruction or damage caused by repairs or alterations to the buildings or premises; repairs removal or expansion of the sprinkler system; and construction defects known to the insured, are not covered.

BUSH FIRE: This covers damage caused by burning, whether accidental or not, scrub and forest and land clearing by fire but does not include loss or damage caused by forest fires.

RISKS NOT COVERED UNDER FIRE INSURANCE POLICY

Claims not maintainable / covered under this policy are:

or theft during or after the occurrence of the insured risks

or war or nuclear perils

or electrical breakdown

prescribed burning or by a public authority

or Subterranean Fire

• Loss or damage to bullion, precious stones, curios (worth over Rs.10000), plans, drawings, money, valuables, checkbooks, computer records, unless they are categorically included.

• Loss or damage to moved to a different location (except machinery and equipment for cleaning, repair or renovation of more than 60 days) goods.

FEATURES OF FIRE INSURANCE CONTRACT

A fire insurance contract has the following features namely:

(A) Fire insurance is a personal contract

A fire insurance contract does not guarantee the safety of the insured property. His goal is to see that the insured suffers loss by reason of his interest in the property insured. Therefore, if your connection to the insured property ceases to be transferred to another person, the insurance contract also comes to an end. It is not so much related to the subject matter of insurance as to automatically switch to the new owner who gives the subject. The contract of fire insurance is therefore merely a personal contract between the insured and the insurer for the payment of money. It can be validly assigned to another only with the consent of the insurer.

(B) is entire and indivisible contract.

If insurance is a binding character and content of the action and machinery, the contract expressly agrees to be divisible. So, when the insured is guilty of breach of duty to the insurance company in relation to one subjects included in the policy, the insurer may avoid the contract as a whole and not only with respect to that particular subject mater, unless that the right is restricted by the terms of the policy.

(C) Cause of fire is immaterial

In fire insurance, the insured wishes to protect from any damage that may occur in the event of a fire, however, may be caused. While the loss is due to fire, in the sense of politics, it is immaterial what the cause of the fire is, in general. Therefore, whether it was because the fire was lit improperly or was lighted properly but attended thereafter negligently or if the fire was caused due to the negligence of the insured or its employees or strangers is immaterial and insurer is liable to indemnify the insured. In the absence of fraud, the immediate cause of the loss seemed only.

The cause of the fire, however becomes material to be investigated

(1). Where the fire was not caused by negligence, but deliberate

(2) When the fire's cause must fall with the exception in the contract.

LIMITATION OF TIME

Liability insurance was an agreement by the insurer to give the insured a contractual right, which at first sight, came into operation immediately when the loss was suffered by the occurrence of an insured event, to be put by the insurer in the same position in which the accused would not have occurred had the event, but in a better position. Had primary responsibility, ie, to compensate, and this is secondary responsibility to put the insured in position before the loss, either by paying a specific amount or could be otherwise. But the fact that the insurer had a choice as to how he would put the secured in position before the loss did not mean he was not required to compensate one way or another, immediately the loss occurred. Primary liability if the insured event occurs that. Thus, the time ran from the date of loss and not from the date the policy was avoided and any claims submitted after this period would be barred by limitation [2].

WHO CAN ASSURE FIRE?

Only those who have insurable interest in a property can take a fire insurance on same. The following are some of the kinds of people that have been held to have an insurable interest in the property and can ensure that property:

1. Owners property, whether alone or co-owner or partner of the company that owns the land. It is not necessary that they should also possess. Therefore, lesser and tenant can thus secure or severely joint manner.

2. The seller and the buyer are entitled to secure. The seller's interest continues until transportation and even after that is completed, if he has a lien on it unpaid seller.

3. The mortgagor and mortgagee have two different interests in the mortgaged property and can ensure, by Lord Esher MR "The mortgagee does not claim interest in the mortgagor, but by virtue of the mortgage has been given a distinct interest from the mortgagor "[3]

4. Trustees are legal and actual beneficiaries of trust property and each can secure beneficial owners.

5. Depositories such as vehicles, pawnbrokers or warehouse men are responsible for there safety and property entrusted to them and can be secured.

PERSON NO RIGHT TO ENSURE

One who has no insurable interest in a property can not be assured. For example:

1. An unsecured creditor can not insure the goods of the debtor, as their duty is only against the debtor personally. However, you can ensure the life of the debtor.

Two. A shareholder of a company can not insure the property of the company as it has no insurable interest in an asset of the company, even if he is the sole shareholder. As was the case Macaura Northen Assurance Co. v [4] Macaura. Because neither as simple nor as shareholder creditor had any insurable interest in it.

CONCEPT OF FAITH SUM

Like all insurance contracts are contracts of utmost good faith, the proponent of fire insurance is also a positive obligation to make full disclosure of all material facts and making false statements or not misdescreptions it during negotiations for obtaining of the policy. This duty of utmost good faith applies equally to the insurer and the insured. There must be complete good faith on the part of the insured. This duty to exercise the utmost good faith is ensured b requiring the proposer to declare that the statements contained in the proposal are true, that will be the basis of the contract and that any incorrect or false statement therein shall avoid politics. The insurer can then rely on them to assess the risk and set the premium and accept or reject the risk.

The questions in the proposal form for a policy of fire may be so framed as to obtain all the information that is relevant to the insurance company to know in order to assess risk and set the premium, ie, all the facts materials. Therefore it is required that the proponent will also give information on:

o The name and address of the proposer and occupation

o The description of matter that has ensured sufficient to identify the purpose of including

o A description of the locality where it is

o How the property is used either for manufacturing purposes or dangerous trade.etc

o If already insured

o And also the story of the ant personal insurance, including claims made buy if the proposer, etc.

In addition to the questions in the proposal form, the proposer must disclose whether questioned or not

1 Any information indicating the risk of fire to be above normal.;

Two. Any fact which would indicate that the responsibility of the insurance company may be more than normal can be expected, as the existence of the manuscripts or documents of value, etc., and

3 Any information you have about most.; danger involved.

The proponent is not required to disclose-

. 1 The information that the insurer can presume to know in the ordinary course of business as an insurance company;

. 2 The facts tend to show that the risk is lower than otherwise;

. 3 Data regarding the information is waived by the insurer; and

April. Facts need not describe in view of a political condition.

Thus has it insured is under a solemn obligation to make full disclosure of material facts that may be relevant to the insurance company to take into account when deciding whether the proposal should be accepted or not. Upon submission of the relevant facts, the

DOCTRINE OF THE APPROXIMATE CAUSE

Where more dangers than an act simultaneously or successively, it is difficult to assess the relative impact of each hazard or select one of them as the real cause of the loss. In such cases, the doctrine of proximate cause helps determine the actual cause of the loss.
Immediate cause was defined in Pawsey v Scottish Union and National Ins. Co., [5] as "the active and efficient cause that sets in motion a chain of events that leads to a result without the intervention of any force started and working actively from a new and independent source." It is dominant and effective even though it is not the closest in time cause. Therefore, when a loss is necessary to investigate and determine the immediate cause of the loss in order to determine if the insurer is liable for the loss occurs.

Immediate cause of DAMAGE

A fire policy covers risks where damage is caused by the path of the fire. Fire can be caused by lightning, explosion or implosion. It may be a result of riot, strike or by reason of any act, malicious. However, these factors should ultimately lead to a fire and the fire must be the proximate cause of the damage. Therefore, a loss caused by the theft of property by militants would not be covered by the fire policy. The view that the loss was covered under the clause of willful misconduct and thus. The insurer was required to comply with the claim is untenable, because unless and until the fire is the proximate cause f damage, no claim under a fire policy would maintain. [6]

PROCEDURE FOR MAKING A FIRE INSURANCE POLICY

Mentioned below are the steps to make a fire insurance policy:

. 1 Selection of Insurance Company:

There are many companies offering fire insurance against unforeseen events. The person or company should be careful in selecting an insurance company. The judgment must be based on items such as goodwill, and long standing in the market. Insurance companies can be approached either directly or through agents, some of them are appointed by the company itself.

. 2 Presentation of the Proposal Form:

The individual or business owner must submit a completed proposal prescribed the necessary details to the insurance company for due consideration and approval. The information contained in the Proposal Form must be given in good faith and must be accompanied by documents that verify the actual value of the property or property to be insured. Most companies have a custom proposal in which accurate information must be provided their own forms.

. 3 Study of the Property / Consideration:

Once the format duly completed proposal is submitted to the insurance company, which makes an "in situ" survey of the property or assets that are the subject of insurance. This by researchers or experts appointed by the company and they need to inform them after a thorough research and survey is usually done. This is essential to assess the risk and calculate the premium rate.

. 4 Acceptance of the proposal:

Once the detailed and comprehensive report is submitted to the insurance company by inspectors and officials involved, the first takes a close reading of the Proposal and report. If the company is convinced that their is no gap or foul play or fraud involved, formally "accept" Proposal Form and directs the insured to pay the first premium to the company. It should be noted that the insurance policy begins after the payment and acceptance of premium by the insured and the company, respectively. The Insurance Company will cover notes issued after acceptance of the first premium.

PROCEDURE OF RECEIPT OF NOTICE OF LOSS

Upon receipt of notification of the loss, the insurer requires the insured to provide details concerning the loss of a claim relating to the information below-

. 1 The circumstances and cause of the fire;

2 Assignment and location of the premises where the fire occurred.;

3 assured interest in the insured property.; ie the capacity in which the insured claims if any others are interested in the property;

. 4 additional property insurance;

. 5 Value of each item of property at the time of the loss, together with evidence thereof, and the salvage value, if any; and

6. Claimed Amount

This information activity relating to the claim is a prerequisite to the insurer's liability. The information above will allow the insurance company to check-

(1) The policy is in force;

(2) The danger that causes the loss is an insured peril;

(3) The property is lost or damaged insured property.

Rules for calculating the value of the property

The value of the insured property is-

1) Its value at time of loss, and

2) In the place of loss, and

3) Its actual or intrinsic without any regard for its sentimental value valley. The potential loss of profit or other consequential loss should not be taken into account.

COMPLAINTS

How is a claim arises?

After a fire insurance contract has come into existence, a claim may arise from the operation of one or more insured perils in a property without obligation. It is possible, in addition to one or more hazards uninsured also operating simultaneously or in succession to the property. In order that the claim be valid the following conditions must be met:

. 1 occurrence must take place due to the operation of an insured or where both insured and other perils operated, dominant or efficient cause of the loss must have been a risk insured risk;

. 2 The implementation of the hazard should not fall within the scope of the exceptions to the policy;

. 3 event must have caused loss or damage to insured property;

. 4 occurrence must be during the term of the policy;

May. The insured must have complied with all conditions of policy and must also meet the requirements to be met after the claim had arisen.

MATERIAL FACTS OF FIRE INSURANCE: previous conviction of the accused

The criminal record might affect an insured moral hazard, which insurers must evaluate, and non-disclosure of a serious crime such as theft by the plaintiff was a non-disclosure of material.

DUTY OF ASSURED IN OUTBREAK OF FIRE, implicit duty

At the outbreak of a fire the insured has an implicit obligation to observe good faith towards insurers and pursuant to which the insured must do everything possible to prevent or minimize the loss. To this end, you must (1) take all reasonable steps to extinguish the fire or prevent its spread, and (2) help firefighters and others in their attempts to do so in any case, does not come in your way.
With this object the insured property may be removed to a safe place. Any loss or damage to insured property may suffer in the course of attempts to fight the fire or while being transported to a place of safety, etc., will be considered loss caused by fire.

If the insured fails in its duty voluntarily and thereby increases the burden of the insurance company, the insured shall be deprived of his right to revive the compensation under the policy [7].

RIGHTS OF INSURER IN FIRE OUTBREAK

Rights (A) includes

Corresponding to the rights of the insured, insurers have rights by law, in view of the liability they have undertaken to indemnify the insured. Thus, insurance companies have the right to-

or take reasonable steps to extinguish the fire and to minimize property loss, and

o To this end, ready to take possession of the property.

Insurers shall be liable to make good all the damage of the property may suffer in the measures taken to put out the fire and as long as in his power, because everything is considered a natural and direct consequence of the fire; therefore, it has been argued in the case of Ahmedbhoy Habibhoy v Bombay Fire Marine Ins. Co [8] that the extent of the damage flowing from the insured risk must be evaluated when the insurer gives back rather than at the time the danger ceased.

(B) losses caused by the measures taken to avoid the risk

The damage occurred because of the measures taken to prevent an insured risk was not a consequence of that risk and was not recoverable unless the insured risk had begun to operate. In the case of Liverpool and London and Globe Insurance Co. Ltd v Canadian General Electric Co. Ltd., [9], the Supreme Court of Canada held that "the loss was caused by the mistaken belief that firefighters that their action was necessary to prevent an explosion, and the loss was not recoverable under the insurance policy that covers only damage caused by the explosion of fire., and the loss was not recoverable under the insurance policy, which covers only damage caused by fire or explosion. "

(C) Rights-ready

Condition 5 - in order to protect their rights and insurers have been established to improve the rights expressly in this condition, according to which in case of any breakage or damage to the insurer and any person authorized by the insurance company can occur enter, take or keep possession of the building or premises where the damage occurred or require to be delivered to them and deal with it all the reasonable effects review, organize, extract, or sell or dispose of the same on behalf of whom appropriate.

How and when a claim is made?

In the case of a fire loss covered by the policy of fire insurance, the Insured shall immediately give notice thereof to the insurance company. Within 15 days of the occurrence of such loss, the Insured must submit a claim in writing, giving details of the damage and estimated values. Details of other insurances on the same property also must be declared.

The Insured must obtain and submit, at his own expense, any documents, such as plans, account books, research reports, etc. in demand by the insurance company.

HOW CAN LEAVE INSURANCE?

Insurance policy may cease fires in any of the following circumstances, namely:

(1) Insurer avoiding the policy because of the insured making misrepresentation, misdescription or non-disclosure of any particular material;

(2) If a fall or displacement of any rank insured building or structure or part thereof, at the expiration of seven days, where, unless it causes the fall or shift was due to the action of any risk insured ; despite this, the insurance can be revived on revised terms if the notice has been given to the company as soon as the occurrence takes place;

(3) The insurance may be terminated at any tie at the request of the insured and, at the option of the company 15 days notice to policyholders

CONCLUSION

Tangible property is exposed to various risks such as fires, floods, explosions, earthquakes, riots and wars, etc, and insurance protection you can have against most of these risks severally or in combination. The way the cover is expressed is numerous and varied. Fire insurance in the strict sense refers to the granting of protection against fire and fire only. So while granting a fire insurance policy requirements are all met what. The insured have a moral and legal obligation to be in the utmost good faith and should be telling a true story and not just a false motives of greed to recover the money. In addition, all insurance policies help in the development of a developing nation. Hence, insurance companies have a burden to help the insured when the insured are in trouble.

REFERENCE:

1. (1983) VR 698 (Supreme Court of Vienna)

2. Callaghan v Dominion Insurance Co. Ltd. (1997) 2 Lloyd's Rep. 541 (QBD)

3. Small v Transport Insurance Association of the United Kingdom (1897) 2 QB 311
4. (1925) AC 619

5. (1907) Case.

6. Compañía Nacional de Seguros v Ashok Kumar Barariio

7. Devlin v Queen Insurance Co., (1882) 46 611 UCR.

8. (1912) 40 IA 10 pcs

9. (1981) 123 DLR (3d) 513 (Supreme Court of Canada)

Recommended books:

1. Economics of Fire Protection by Ganapathy Ramachandran

February. Modern Insurance Law by John Birds

Three.'s Manual Regulatory and Development Authority Act and Regulations Insurance Allied Laws, by Nagar

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