Base on the word fire insurance and the characteristics with the feature plays a vital role because of the property coverage that pays for destroying assets and some other losses you may suffer from fire.
Fire insurance covers the cost of replacing the damaged property in your home and the costs of accommodations while your home is unusable.
There are many benefits attached to insurance. Before people start going for it, a report was revealed that in 2019, The National Fire Protection Association explained that more than 350,500 house fires each year.
And if we are to look at it, it is not something good when we experience too much fire every time.
There are different types of insurance, but fire insurance is important as it protects against damages caused by fire.
Fire insurance can be done with an agreement by two persons that are an insurer and insured. The insurer agrees to indemnify the insured for losses incurred by him due to fire. And then, the insurer changes the premium from the insured in return for compensating him for losses.
It stands as a tool that only compensates for losses by fire but can’t control or avoid fire. Furthermore, the term “Fire” states that fire or ignition should be actual and accidental.
Features of Fire Insurance
Here are the five features of fire insurance. These include:
Covers Insured Amount
Payment Of Premium
Contract Of Indemnity
Compensation For Fire Losses
Characteristics of Fire Insurance
Personal Insurance Contract:
This is a personal contract between an insurer and insured, and the inclusion of insured is inevitable because it is involved with assets. Then without the insurer consent, the insured cannot bring any changes in the insurance policy.
Another thing is that the insurer must be informed of the transfer of property possessed by the insured.
Full Description of Property:
As an individual willing to take policy is required to disclose accurate and fair information about the assets. Any misrepresentation of facts will make the insurance contract void.
Nothing should be hidden, and you have to give a complete description of the property. More so, claiming compensation is a must that any loss or damage to property occurs only at the mentioned location without changing the location afterwards.
Fire only the cause of loss:
Understand that fire only cause losses and damages to the insured property, which is considered under the insurance contract. After injuries insured can equally claim compensation from the insurer for losses caused by fire.
The fire must be actual and accidental because their damages or losses due to heat or smoke are not covered under losses by fire.
You have the right over the compensation if your name is mentioned in policy documents, but you are eligible for the payment if your name is not mentioned.
Utmost Good Faith:
Get it right that the principle of utmost good faith governs the fire insurance contract. Meaning that no secrets involved, and facts must be disclosed relatively about the property by the insured to the insurer. However, the insured must not misrepresent any details regarding assets.
The insurer is also required to explain clearly all terms of the contract to the insured. The insurer has the right to terminate the agreement if found that the insured has concealed some information regarding property from him when forming a contract.
Do I Need Fire Insurance?
Yes, the answer to this question is that your home and workplace are most important. After all, fire insurance protects you against financial disaster.
Even if you a mortgage, your lender will require you to purchase homeowners insurance, but it’s a good idea to have it even if you own your home free and clear.