Fire Insurance provides coverage against loss caused by fire .This is beyond the property insurance, although few property insurances covers the loss of fire as well but in more special cases when your business or personal property is more prone to risk of fire then a separate fire policy needs to be purchased. An ideal fire insurance policy covers loss of fire to the building, its premises and equipment as well as it covers loss sustained to surrounding area.
There are two basis on which insurance policy provides coverage: actual value and replacement value basis. On actual value basis, coverage is provided by paying actual value of the burnt property less accumulated depreciation. The decrease value as a result of depreciation and increased value as a result of appreciation, both are accounted for in terms of coverage limit. In case of Replacement value basis, Insurance Company will replace with same coverage amount even the building value appreciated.
Because of the more benefits, replacement value insurance policy consumes heavy insurance premium. In case of actual cash value basis, in case the item was more depreciated coverage amount will rise and fall accordingly hence may give some comparatively less economic benefit.
Insurance cost varies as per terms of fire insurance policy. By adding, sprinklers, security alarm, training for fire condition management these efforts may decrease the insurance coverage cost. In some cases, insurance policy also requires the insured business to have these tools available. As an additional benefit, some insurance policies do provide facility to provide rented house in the event when house suffered losses from fire is in the process of repairment. This benefit will definitely charge more to the insured person but will give huge financial benefit in case fire occurred. Insurance premium will also cost more to those who are living in wildfire area. In order to make insurance company fire brigade informed, there are used some fire insurance signs outside the insured building. These are copper and lead plaque with sing of insurance company showing specific relevance.
Make sure, fire insurance policy does not provide coverage for fire that has occurred form natural or act of God. In case of earthquake if fire is caused because of natural factors, insurance company will not be in position to compensate. So while reading and agreeing to terms of fire insurance and all types of insurance policies, all terms should be clearly understood and verified if any thing is confusing.
Another very important matter is measuring the value of your property and claim coverage as per exact worth of property damage. There happen some cases when insured persons have received insurance coverage less than the worth of property burnt in fire.
Always make proper valuation of your business structure and building in order to putt claim on insurance company. All of the building and structure must be valued, insurance premium paid accordingly and benefit consumed in the event require. Ideal way to correctly value your property is to hire some independent valuer who regularly measures the value of your property. Best way is to not rely on insurance policy professional or property tax advisor.