2.1.1.

Meaning of Fire and Loss or Damage by Fire

The word fire literally means a condition of burning and is used in popular
sense to mean friendly fire used for manufacturing or domestic purpose.

In Insurance fire means only hostile fire in a place where it has broken bounds.

Fire in this sense means:

 There must be actual fire or ignition
 It must be accidental or fortuitous in origin so far as insured is concerned.

The phrase 'loss or damage by fire' also includes the loss or damage caused
by efforts to extinguish fire.

2.1.2. Principle of Causa Proxima (Proximity Clause)

In order to establish a claim under a fire insurance policy it will not be

sufficient to prove that the loss is attributable to fire. It will also be essential
to prove that the fire must be the efficient proximate cause for the loss.

In other words the fire must not be the immediate cause or dominant factor
and not the remote or the distant cause.

This is in terms of Principle of Causa Proxima.

2.2. Procedure for taking Fire Insurance Policy

A person desirous of taking a Fire Insurance Policy should follow the following
steps:

A. Selection of Company
As a first step the fire insurance company with which the insurance is
to be effected must be identified.

B. Proposal Form
Once the Insurance Company has been selected the next step is to fill
the proposal form which forms the basis of the contract.

 The proposal Form would require the following details to be filled up:
 Name and Address of the Proposer
 Nature of Business
 Details of Asset to be Insured
 Type of Fire Insurance Policy ie Specific Policy,

Comprehensive Policy, Valued Policy

 Current Market Value of the Asset
 Amount for which the Insurance is to be taken.

C. Evidence of Credibility
The Insurance Company may check the credentials of the proposer to
establish his credibility and ensure that he has not been involved in
any unscrupulous activity.

D. Survey of the Property

The next step in Fire Insurance is to take the survey of the property
proposed to be insured by qualified experts known as Surveyors.
The Surveyors are to inspect the property carefully and to estimate
the degree of risk involved. It is on this basis of this report of the
Surveyors that the Insurance Company accepts or rejects the proposal
and quotes the rate of premium.
 E. Acceptance of Proposal Form
On the basis of the proposal and the report of the Surveyor the
Insurance Company would accept or reject the proposal.

F. Commencement of Risk
The next step is to pay premium. Once the premium is paid the
coverage of risk would commence.

G. Cover Note
The Insurance Company may accept risk unconditionally or subject
to certain conditions and may give provisional protection to the
Insured by a document known as Cover Note.

H. Policy
The final step is to issue the Fire Insurance Policy.

2.2.1. Types of Losses covered by Fire Insurance are:

The following losses have been held to be caused

proximately by fire:

 Loss which is the necessary consequence of fire in the sense that had

there been no fire it would not have happened.

 Loss which is reasonable and probable consequence of fire in that it

results in ordinary course of event from the happening of fire.

 Loss caused by water used to extinguish fire, destroying property or by

Fire Brigade in the execution of their duties.

 Loss arising as a consequence of removal of property from the building

in which fire in ranging with the intention of saving it or loss due to

theft during the confusion caused by fire.
 Wages paid to persons engaged in extinguishing fire.