Professional Documents
Culture Documents
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4. The contract of insurance is embodied in a policy called the fire policy. Such
policies usually cover specific properties for a specified period.
5. Insurable Interest: A fire policy is valid only if the policy-holder has an insurable
interest in the property covered. Such interest must exist at the time when the loss
occurs. In English cases it has been held that the following persons have insurable
interest for the purposes of fire insurance- owner; tenants, bailees, including
carriers; mortgages and charge-holders.
6. In case of several policies for the same property, each insurer is entitled to
contribution from the others. After a loss occurs and payment is made, the insurer is
subrogated to the rights and interests of the policy-holder. An insurer can reinsure a
part of the risk.
7. Fire policies cover losses caused proximately by fire. The term loss by fire is
interpreted liberally. Example: A women hid her jewellery under the coal in her
fireplace. Later on she forgot about the jewellery and lit the fire. The jewellery was
damaged. Held, she could recover under the fire policy.
8. Nothing can be recovered under a fire policy if the fire is caused by a deliberate act
of policy-holder. In such cases the policy-holder is liable to criminal prosecution.
9. Fire policies generally contain a condition that the insurer will not be liable if the
fire is caused by riot, civil disturbances, war and explosions. In the absence of any
specific expectation the insurer is liable for all losses caused by fire, whatever may
be the causes of the fire.
10. Assignment: According to English law a policy of fire insurance can be assigned
only with the consent of the insurer. In India such consent is not necessary and the
policy can be assigned as a chose-in-action under the Transfer of Property Act. The
insurer is bound when notice is given to him. But the assignee cannot be recovering
damages unless he has an insurable interest in the property at the time when the loss
occurs. A stranger cannot sue on a fire policy.
11. Payment of Claims: Fire policies generally contain a clause providing that upon
the occurrence of fire the insurer shall be immediately notified so that the insurer
can take steps to salvage the remainder of the property and can also determine the
extent of the loss. Insurance companies keep experts on their staff of value the loss.
If in a policy there is an international over valuation of the property by the policyholder, the policy may be avoided on the ground of fraud.
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It is the essential for the insured to have insurable interest in the subject matter of both
when the policy is affected and when the loss takes place.
3. Contract of indemnity
The principle of the contract of indemnity is applicable to fire insurance. The amount can
be claimed only after the loss has taken place during the stated period. If there is no loss no
claim will be accepted.
4. Personal contract
Fire insurance is a personal contract between the insured and insurer. The policyholder
cannot assign or transfer it without the perior consent of the insurance company.
5. Duration
A fire policy is issued for a period of 10 days to 12 months but it can be renewed after the
expiry of their period.
6. General conditions
There must be an agreement in the prescribed form. The concerned parties must be
competent to contract. The object must be legal and not against the public interest.
7. Personal Right
The person, whose name has been mentioned in the contract, is entitled to receive the
insured sum from the insurer at the event of loss by fire on insured property.
8. Claim Limit
The actual market value of the goods or property destroyed by fire can be claimed only by
the insurer. In such type of contract there is no profit motive.
9. The premium and Consideration
The contract is based on the consideration which means the granting of protection by the
insurer in exchange for the payment of premium by the insured. The policy must mention
the sum of insurance and the rate of premium.
10. Description of the subject matter
It is essential part of the contract that the policy must describe the: location of the property.
It helps the insurer to determine the rate of premium.
Fire Insurance Policy
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13. Subrogation
Under this principle the insurer after paying a loss has ful1 right and privileges against
third party in respect of loss so paid for. These rights may be justified, The problem of
subrogation arises when a fire is caused by the negligence of the third party, for which
negligence the party whose property is destroyed by fire may recover under rules.
14. Suspension of the policy
The insurance company is empowered to suspend the insurance due to some reasons. The
insurer shall not be liable for loss happening if the chances of risk increase by any means
within the control of the policy holder.
15. Notice of loss
The policy holder must serve immediate notice in writing to the concerned insurance
company of any loss. It enables him to take action to reduce the loss, to investigate the
reason of fire and to determine his liability.
16. Adjustment of loss
On receiving the notice; the insurer makes arrangement to adjust the loss. The company or
its representatives with considerable authority may enter and take possession of the
damaged property.
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Stocks:
Raw Material
Finished Goods
In process
In trade belonging to Wholesaler, Manufacturer and Retailer.
Specific Items such as bullion, unset precious stones, curios, work of arts, manuscripts,
plans, drawings, securities, obligations or documents, stamps, coins or paper money,
cheques, books of accounts, computer system records, explosives.
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Fire
Excluding destruction or damage caused to the property by
a) i) its own fermentation, natural heating or spontaneous combustion.
ii) its undergoing any heating or drying process.
b) burning of property insured by order of any public Authority
Lightning
Explosion/Implosion
Excluding destruction or damage caused to the boilers (other the domestics
boilers),economizers or other vessels in which steam is generated,machinery or apparatus
subject to centrifugal force by its own explosion/implosion
Aircraft Damage
Destruction or damage caused by Aircraft, other aerial or space devices and articles and
articles dropped therefrom excluding those caused by pressure waves
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Impact damage
Loss of or visible physical damage or destruction caused to the property insured due to
impact by any rail/road vehicle or animal by direct contact not belonging to or owned by
a) The insured or any occupier of the premises
b) their employees while acting in the course of their employment
Bush fire
Provided that the liability of the company shall in no case exceed in respect of each terms
sum expressed in the said schedule to be insured thereon or in the whole the total sum or
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Electrical breakdowns
Subterranean fire.
Loss or damage to bullion, precious stones, curios (value more than Rs.10000),
plans, drawings, money, securities, cheque books, computer records except if they
are categorically included.
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Add on covers
In addition to the perils/ expenses covered, the proposer can opt to seek cover in respect of
the following perils/ expenses at inception or during currency of the policy on payment of
additional premium :
Perils:
Loss/ damage/ destruction of the property caused by
Expenses :
Architects , Surveyors and Consulting Engineer's Fees (in excess of 3% claim
amount)
Debris Removal (in excess of 1% of claim amount)
Loss of rent.
Insurance of additional expenses of rent for alternative accommodation.
Start up Expenses.
Common Documents for all claims under a Standard Fire and Special Perils Policy:
1.
2.
3.
4.
5.
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II.
III.
IV.
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COMPANIES VISITED
Present Position
Gross Premium (in India) of Rs. 5017.20 crores in the year 2006-2007, as against
Rs. 4791.49crores in the year2005-2006. Assets Rs. 27444.57crores as on 31st March 2007.
Network of Offices-26 Regional Offices, 393 Divisional Offices, 614 Branches and 34
Direct Agent Branches. Rank No. 1 in the Indian market. Largest Non-Life insurer in AfroAsia excluding Japan. First Indian non-life company to cross Rs. 5000 crores Gross
Premium. Global Re-insurance facilities. Over-seas presence in countries like Japan, U.K,
Middle East, Fiji and Australia.
International Presence
Overseas operations commenced in 1920. Operations in 24 countries in the year 2004-05.
Network of 19 Branches, 12 Agencies, 2 Associate companies and 2 Subsidiary companies
in the year 2004-05. Overseas Premium of Rs. 892.35 crores in the year 2004-05, which
accounts for more than 80% of total overseas premium in India.
Performance
New India Assurance Company is the largest non-life insurer in India. The financial
strength of the Company is reflected from the following figures:-
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Year
2007-2008
2006-2007
2005-2006
2004-2005
2003-2004
2002-2003
2001-2002
2000-2001
1999-2000
1998-1999
1997-1998
Gross
Gross
Premium Net Premium Net Profit Total Assets
Premium
(Outside
(Global)
(Global)
(Global)
(in India)
India)
5276.91 874.55
4914.28 1401.13
31944.14
5017.20 919.58
4751.76 1459.95
27444.57
4791.49 884.05
4342.66 716.38
27025.58
4210.81 892.35
3895.11 402.23
19827.19
4045.68 875.79
3634.94 590.21
17510.44
3921.24 891.55
3516.43 255.81
12984.75
3512.33 685.73
3068.23 142.00
12273.02
3041.17 451.88
2671.48 173.54
8292.00
2979.53 327.00
2477.45 287.29
7664.71
2729.48 288.16
2186.92 375.00
6727.72
2433.73 254.04
1945.00 470.94
6071.67
Net Worth
(Global)
6972.80
5972.55
4706.87
4161.69
3735.22
3404.00
3189.39
3067.39
2859.86
2524.23
1462.52
PERSON CONTACTED: Mr. Bhagwan Patil, Asst Manager ( Marketing) and Mrs.
Anjali P. Karve Admn. Officer Of The New India Assurance Co. Ltd.
SALES PROCESS:
Sales Process includes Contacting the client and doing analysis of the Risks client is
exposed to. After analysing a detailed presentation is prepared to show it to the client and
convey the client risks and policies which covers the risks the client is exposed to.
Who takes Fire insurance?
Fire Insurance Policy
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Generally Fire insurance is taken by companies which uses raw material which easily
catches fire. Companies which uses hard metals as raw materials do not wish to take fire
insurance.
How to sell Fire insurance?
Fire insurance Products are to cover the various risks to which a manufacturing firm is
exposed to. Selling procedure includes the survey of these risks and provide awareness to
the client about the risks.
Views on fire insurance:
Fire insurance an effective tool for any firm or Property owner to minimize the financial
loss in event of loss on his/her property. Insufficient Awareness of the policy among people
is the main constraint in making positive perception about the policy.
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Products:
Closed Tolerance
components
Person contacted:
Mr. Venkata N. Malladi, Head Account & Finance, M/S Anandji Haridas & Co. Pvt. Ltd
Insurance Policies Taken:
1. Marine Cargo Policy (Bajaj Allianz General Insurance Co. Ltd.)
Total Sum Insured is Rs. 5,65,639
2. Standard Fire & Special Peril Policy (United India Insurance Co. Ltd.)
Total Sum Insured is 3 crore.
Claim Record:
There were no such claims by the Company.
Views & Experiences about Fire Insurance Policy:
Policy is taken as it is compulsory.
They renew the policy every year under the guidance of an Insurance Consultant.
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