Any property which is subject to damage by fire can be insured against fire. Marine insurance was useful only to persons engaged in some kind of trade. Fire insurance policies are classified into 15 types based on insurance hazards, insured risk, business type, policy rules. Notes on advantages and disadvantages of insurance grade. It covers the replacement, reconstruction or repair expenses of the insured property as well as the surrounding structures. Life insurance is a protection against financial loss that would result from the premature death of an insured. For instance, if you intentionally start a fire in your home, youll generally find homeowners insurance will not pay to repair the damage. The reinsurer agrees to indemnify the cedant insurer for a specified share of specified types of in surance claims paid by the cedant for a single insurance policy or for a specified set of. Here the insurance company will pay to the policyholder any loss caused to him or his particular property when destroyed by a fire accident. Fire insurance is a contract to indemnify the loss suffered by the insured. Fire insurance is a kind of contract between the insurance company and the insured, where the insurer assures to cover the damages and. It covers the property lying at different places against loss by fire.
If one goes by the word meaning insurance is a contract between two parties whereby the insurer agrees to indemnify the insured. Fire insurance pays or compensates for the damages caused to your property or goods due to fire. Last month, a fire erupted at his place and engulfed. Fire insurance fire insurance is a contract under which one party in return for a consideration agrees to indemnity the other party for the financial loss. The fire insurance protects the insured against the risk of fire. It is a specific form of insurance in addition to homeowners or property insurance, and it covers the cost of replacement and. Important characteristics of a fire insurance every insured. Cbse class 11 business studies notes aglasem schools. Fire and marine insurances are strictly called property insurance.
An entrepreneur may have some of his goods and other at other storable places. An average clause will always be there in a floating policy. The devastating effects of the fire converted the development of insurance from a matter of convenience into one of urgency, a change of opinion reflected in sir christopher wrens inclusion of a site for the insurance office in his new plan for london in 1667. A policy is available at a premium, and it covers for the loss caused to the victim due to a fire. Communication services, transportation and warehousing.
The great fire of london in 1956 destroyed,000 houses in four days. The insured is the person or firm or company confronted by risk and the insurer is a person or firm or company, which specializes in the assumption of risk. The 15 types of fire insurance policies are explained below. It also covers the damages caused to a thirdparty property due to fire. Commercial property insurance can be sold separately as an individual line policy referred to as a monoline policy, or it can be sold as part of a commercial package policy cpp, which combines two or more commercial coverage parts such as commercial property, general liability, and commercial auto. The following kinds of policies are generally issued for fire insurance. Insurance is a very important topic mba, bcom,mcom and other finance related degrees. Examine the different types of insurance available. A policy is available at a premium, and it covers for the loss caused to the victim.
Fire insurance is a contract between the insurer and the insured whereby the insurer undertakes to indemnity the insured for destruction of or damage to the properly caused by fire or. A fire insurance policy involves an insurance company agreeing to pay a certain amount equivalent to the estimated loss caused by fire to the insured, within the time specified in the contract. Insurance is an agreement where, for a stipulated payment called the premium, one party the insurer agrees to pay to the other the policyholder or his designated beneficiary a defined amount the claim payment or benefit upon the occurrence of a specific loss. Fire insurance covers damage or loss to a property because of fire. Apr 22, 2019 a fire insurance fire insurance is a contract under which one party in return for a consideration agrees to indemnity the other party for the financial loss. He did not mean to hit the identify key terms associated with insurance and risks.
The value of the property to be insured is determined at the inception of the policy. Jayant sinha bought a fire insurance policy to insure his goods worth rs 50 lakhs. It is a contract made between the insurer and the provider of the insurance service. The main function of insurance is that eliminates the uncertainty of an unexpected and sudden financial loss. The reinsurer agrees to indemnify the cedant insurer for a specified share of specified types of in surance claims. It is pertinent to note that the functions of any insurance remained confined to the terms and conditions of different type of insurance policies. Fire insurance is that insurance contract which take place against fire and other risk which are mentioned in the fire insurance contract. Different types of marine insurance plans policybazaar. In this video i explain what is insurance, the general principles, and types of life, fire and marine insurance. Fire insurance is that insurance contract which take place against fire and other risk which are mentioned in the fire insurance. Insurance pdf types of insurance, scope of insurance.
The devastating effects of the fire converted the development of insurance from a matter of. Types of life insurance policies in india coverfox insurance. Homeowners insurance may not cover all types of fire damage. Fire insurance features average clause insurable interest. The named beneficiary receives the proceeds and is thereby safeguarded from the.
The insurer pays the total admitted value irrespective of the then market value of the properties. Practice of general insurance notes 5 fire insurance diploma in insurance services insurable interest exists not only with the ownership but also as a tenant or bailee or financier. Types of fire insurance reference notes grade 12 management. What are the different types of fire policies available in india. Apr 09, 2015 fire insurance is a contract between the insurer and the insured whereby the insurer undertakes to indemnity the insured for destruction of or damage to the properly caused by fire or other specified perils during an agreed period of time, in return for payment of a premium in lumpsum or by installments. Explain the purpose and importance of different types of insurance protection as a risk management strategy e. Practice of general insurance notes 3 fire insurance diploma in insurance services in which within span of three days from 2 nd to 5th sept. Feb 10, 2014 in this video i explain what is insurance, the general principles, and types of life, fire and marine insurance. The growth of the international trade of the country has been greatly helped by shifting of risk to insurance company.
Reinsurance b marin insurance marine insurance is a contract between the insured and the insurer. Apr 02, 2019 life insurance is a protection against financial loss that would result from the premature death of an insured. A policy is available at a premium, and it covers for the loss. What are the different types of fire policies available in. Life insurance, fire insurance, and marine insurance meaning. Insurance pdf types of insurance, scope of insurance, classification vehicle insurance on buses, cars, trucks, motorcycles, etc. A fire insurance policy covers for losses that are caused by fire. Property insurance as we know it today can be traced to the great fire of london, which in 1666 devoured more than,000 houses. Life insurance, fire insurance and marine insurance. Discuss insurance notes for mba within the financial management fm forums, part of the resolve your query get help and discuss projects category. Insurance is a means of protection from financial loss.
It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss an entity which provides insurance is known. The fire havoc can be experienced by persons of all walks of life. A reinsurance contract is legally an insurance contract. Average clause in fire insurance policy to take care of cases of underinsurance, there. In this policy the value of the subjectmatter is agreed upon at the time of. It explains the concept of insurance and how it is. Homeowners insurance also typically does not cover damage caused by an act of war. It covers the replacement, reconstruction or repair expenses of the. First, only buildings were insured and the first fire office was established by a builder nicholas barbon in. Notes on types and policies of marine insurance grade 12. Insurance as we know it today can be traced to the great fire of london, which in 1666 devoured,200 houses. It automatically lapses after the expiry of the year, unless it is renewed. Personal accident insurance by paying an annual premium.
Lecture notes insurance 1introduction need for insurance arises from uncertain income e. Notes on advantages and disadvantages of insurance grade 10. Notes principles of general insurance principles of insurance 54 5. Take notes of the accident if you are involved in a motor accident, take notes of the accident, i. Aug 29, 20 a fire insurance policy involves an insurance company agreeing to pay a certain amount equivalent to the estimated loss caused by fire to the insured, within the time specified in the contract.
For simplicity, assume that there is a 50% probability that after the accident the car will need repairs costing 500, a 40% probability that the repairs will cost 5000, and a 10% probability that the car. Here the insurance company will pay to the policyholder any loss caused to him or his particular property when destroyed. Fire insurance definition, characteristics and policy types. It explains the concept of insurance and how it is used to cover risk. A fire policy containing an average clause is called an average policy. The named beneficiary receives the proceeds and is thereby safeguarded from. Jun 25, 2019 fire insurance covers damage or loss to a property because of fire. A fire breaks out and burns to ashes all the merchandise of a business man. Average clause in fire insurance policy to take care of cases of underinsurance, there will be an average clause in fire policy. Any person or firm that has a financial interest in the property to be insured can avail this insurance. Property insurance can be traced to the great fire of london, which in 1666 devoured more than,000 houses. So the protection is against any damage that the fire causes. Insurance pdf types of insurance, scope of insurance,classification hello friends welcome to. Direct loss as it is a fire insurance, the fire should be the direct and immediate cause of the loss or damage.
But insurance is one of the devices by which these risks may be reduced or eliminated. The insured can, in the event of loss recover the actual amount of loss form the insurer a person is not allowed to gain by insurance. Important characteristics of a fire insurance every. A fire insurance is a contract between the policyholder and the insurer. For the convenience of client this policy is undertaken. In this chapter, we cover various aspect of general insurance such as principles of utmost good faiths.
Personal right the person whose name is mentioned in the fire insurance contract as the policyholder is eligible to receive the insured amount in case of any loss or damage. Marine insurance, as the name goes, offers a means of financial protection against damage or loss caused to ships, boats, yacht, and most important of all, the cargo. However there are certain functions which apply to every kind of insurance including life insurance as well as general insurance that includes every type of insurance such as home, automobile, jewellery, property and other valuable assets. Types of fire insurance includes comprehensive policy, blanket policy, consequential loss policy, valued policy, valuable fire insurance policy, specific fire. In the aftermath of this disaster, nicholas barbon opened an office to insure buildings.
The different types of fire policies available in india are. The general insurance includes property insurance, liability insurance, and other forms of insurance. If the policy excludes coverage for fire damage, then fire insurance may need to be purchased separatelyespecially if the property contains. Sep 15, 2016 fire insurance policy is for a period of one year, after which it is to be renewed form time to time. Pure risk is a situation that holds out only the possibility of loss or no loss or no loss. Motor, theft, fidelity and machine insurances include the extent of liability insurance to a certain extent.
Functions of an insurance company 1 provides reliability. How insurance is transacted as a business and how the insurance market operates are also explained. The types of losses not covered by a fire insurance policy are. Motor insurance introduction types of motor policies third.
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