Fire Insurance

Fire insurance safeguards property against losses or damages resulting from fire incidents. It protects individuals and businesses from the financial impact of property damage or destruction caused by fire. Investing in a fire insurance policy can reduce the financial burden of repairing, replacing, or rebuilding property after a fire.

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Why is Fire Insurance important?

In India, fire-related incidents are distressingly frequent, stemming from a range of causes, including electrical faults and natural calamities. These calamities can inflict severe harm on both individuals and businesses, resulting in substantial financial setbacks and property destruction.

Fire insurance emerges as a critical safeguard in these situations, serving as a vital financial lifeline against the devastating aftermath of fire accidents. Beyond merely offsetting immediate financial losses, it also ensures adherence to safety standards within sectors mandated to possess fire insurance.

Hence, opting for fire insurance showcases the preparedness and forward-thinking of individuals and businesses, enhancing their readiness to confront the unexpected challenges posed by fire hazards.

How Fire Insurance Works?

Fire insurance protects individuals or businesses against the financial consequences of fire-related damage. When a person or company acquires a fire policy, they establish an agreement with an insurance provider and commit to regular premium payments to maintain coverage.

In the event of a fire causing harm to the insured property, the policyholder reports the incident to the insurance company, which conducts an investigation to assess the validity of the claim. If the claim is consistent with the policy terms, the insurance company issues compensation to cover the financial losses resulting from the fire.

Who Should Purchase Fire Insurance?

Fire insurance is essential for businesses of all sizes and industries. Any business that owns or leases property, whether it's an office building, retail store, manufacturing facility, or warehouse, should consider purchasing fire insurance.

Businesses that store valuable inventory, equipment, or machinery on their premises should also invest in a fire policy to protect against the financial losses that could result from fire-related incidents. Furthermore, businesses located in areas prone to natural disasters or with a history of fire incidents should prioritize obtaining property insurance to reduce risks effectively.

Ultimately, any business owner who wants to safeguard their assets, ensure business continuity, and protect against potential financial liabilities should seriously consider purchasing commercial fire insurance.

Features of Fire Insurance

The features of a fire insurance policy are as follows:

  • Fire insurance offers coverage against fire incidents.
  • It protects various types of property from fire damage.
  • The insured receives reimbursement for repair or replacement costs.
  • Coverage limits can be tailored to specific needs.
  • Business interruption coverage compensates for lost income.

Types of Fire Insurance in India

Here are the types of fire insurance policies in India that you can purchase:

  1. Standard Fire & Special Perils: This policy covers the loss or damage caused to buildings, plant and machinery, stock and other assets for a sum insured exceeding ₹50 Crores.
  2. Bharat Sookshma Udyam Suraksha: This policy covers the loss or damage caused to buildings, property, plant and machinery, stocks and other assets for a sum insured up to ₹5 Crores.
  3. Bharat Laghu Udyam Suraksha: This policy provides coverage for the damage or destruction caused to the building, plant & machinery, stocks and other assets for a sum insured between ₹5 Crores and ₹50 Crores

Ideal Fire Insurance Plans in India

In the table below, have a look at the different insurance companies providing fire insurance plans in India:

Insurer Claim Settlement Ratio
Chola MS Fire Insurance 75%
IFFCO Tokio Fire Insurance 97.54%
ICICI Lombard Fire Insurance 71.66%
Liberty Videocon Fire Insurance 78.47%
Magma HDI Fire Insurance 88.18%
National Insurance Fire Insurance 61.75%
New India Assurance Fire Insurance 64.90%
Oriental Fire Insurance 81.40%
Raheja QBE Fire Insurance 40%
SBI General Fire Insurance 66.95%

Disclaimer: *Policybazaar does not recommend, rate or endorse any particular insurer or insurance product offered by an insurer.

Inclusions Under Fire Insurance in India

Covering a wide range of perils, it is often termed as Standard Fire and Special Perils Policy is also known as SFSP. In the below grid, let us have a look at the inclusion the policy offers:

Fire Insurance Perils Inclusions
Fire The fire insurance policy provides coverage for any damage caused by the fire.
Lighting If any damage/loss occurs because of lighting, for instance, cracks in the roof/building area, etc., will be covered.
Explosion Damage caused by a fire explosion is covered under this policy.
Aircraft Damage If any damage happens which leads to fire due to an aircraft, for instance, articles dropped by an aircraft, airborne devices etc., will be covered under the policy.
Terrorist Activity, Riots/Strike Any harm to the protected property caused because of a strike, riot or any fear-monger action, is secured by fire policy.
Natural Calamity Any damage to the insured property due to any natural calamity, such as storms, typhoons, etc., is covered under the fire policy.
Landslide/Rockslide You will be covered for the destruction caused to your property due to a rockslide/landslide.
Bursting/Overflowing of the Water Tank If the property is damaged due to bursting/overflowing of the water tank, it will be covered.
Bush Fire Setting fire to overgrown bushes/plants may end up damaging the property. This will be covered under the policy. Please note that the fire policy will not cover the destruction caused due to the forest fire.

Exclusions Under Fire Insurance Policy in India

The fire insurance policy does not provide coverage for the following events:

  • Deliberate, willful or intentional acts
  • Loss or damage to stocks in cold storage because of a change in temperature
  • War, invasion, war-like operations
  • Pollution or contamination
  • Missing property or mislaid
  • Consequential or indirect loss or damages
  • Costs, fees or expenses for preparing any claim
  • If the insured premises or building remains unoccupied for more than 30 days.
  • Unset precious stones, bullion or work of art unless specifically declared
  • Loss or damage to any of the electrical machines, short circuits, apparatus, leakage of electricity, etc. This exclusion applies to a particular machine that is lost or damaged.

Add-on Coverage in Fire Insurance

Upon the payment of an additional premium, the insured can benefit from the following add-on coverage:

  • Earthquake
  • Wreckage removal
  • Forest fire
  • Loss of rent
  • Start-up cost
  • Alternate accommodation
  • Unconstrained burning
  • Damage to stock because of change in temperature
  • Leakage and contamination cover
  • Architect, Engineers, Surveyors consultation fee
  • Cover for molten metal spillage
  • Impact loss owing to the insured’s own road/rail transit
Explore Fire Insurance

Fire Insurance Claim Process

Below are steps to claim your fire insurance policy:

  1. Notify Your Relationship Manager

    Promptly notify your assigned relationship manager about the incident.

  2. Complete & Submit Claim Form

    Complete and submit the provided claim form along with relevant documentation.

  3. Evaluation & Claim Registration

    Your relationship manager will transmit the submitted details to the insurer to commence the claims process.

  4. Appointment of Surveyor

    The insurer will designate a surveyor to assess the situation and determine the extent of damages.

  5. Document Submission

    Once the survey begins, the surveyor will guide you through the necessary documentation process. Submit all required documents as instructed for smooth claim processing.

  6. Claim Settlement

    Upon conclusion of the evaluation process and approval of your claim, the insurance company will quickly disburse the claim funds to you for timely resolution of the incident.

Please note: The insurer will carefully review the terms and conditions of your policy to ascertain coverage eligibility for the reported incident. Consequently, the decision to accept or reject the claim will be made solely by the insurer.

Documents Required to File Fire Insurance Claim

Below is the list of essential documents necessary for processing any fire insurance claim:

  • An authorized copy of the fire policy, which includes the schedule and clauses.
  • Submit the fully completed claim form.
  • A copy of the article if the incident was reported in the newspaper
  • Records of previous claims, if any.
  • Photographs
  • Report by the fire brigade.
  • Copy of FIR or police intimation

Qualifying Criteria to Buy Fire Insurance Policy

Here are the qualifying criteria for buying a fire or stock insurance policy:

  • To qualify for property insurance, you must be the rightful owner of the property you want to insure.
  • Different insurance plans apply depending on the type of property (apartment, detached house, office space, or industrial property).
  • Insurance companies have minimum property value requirements to provide coverage.
  • Insurance companies assess the condition of the property before issuing a policy to identify potential hazards.
  • When applying for insurance, you need to submit specific documents such as proof of ownership, residency, and identity.
  • A clean credit history and high credit score may qualify you for lower insurance premiums.
  • Older properties typically require higher insurance coverage because of increased risk.
  • A history of frequent claims can affect the qualifying criteria for insurance policies.

Why Should You Purchase Fire Insurance via Policybazaar for Business?

  • 365-Day Claim Assistance: Our team of experts is available every day, ensuring quick support for your claims.
  • Dedicated Relationship Manager: Seek personalized assistance from a committed manager who prioritizes your needs throughout the process.
  • Quotes from Multiple Insurers: Get a wide range of quotes from top insurers at competitive rates.

Frequently Asked Question

  • Q: What is impact damage?

    Ans: Impact damage means when an external object such as a car, bike, tree, etc. damages your insured property after collision or impact.
  • Q: What do you mean by reinstatement value?

    Ans: Reinstatement value refers to the cost of restoring or replacing the insured property to its original condition before the fire. It is also known as new replacement value.
  • Q: How long does fire insurance protect the insured?

    Ans: The fire & burglary insurance policy protects the insured for a duration of 12 months.
  • Q: What are the objectives of fire insurance?

    Ans: The objectives of fire insurance are as follows:
    • Provide financial protection against fire-related losses
    • Ensure business continuity
    • Preserve asset value
    • Offer peace of mind
    • Support reconstruction efforts.
  • Q: What are the principles of fire insurance?

    Ans: The principles of fire policy include insurable interest, utmost good faith, indemnity, subrogation, and contribution.
  • Q: What are the benefits of fire safety?

    Ans:Fire safety measures offer benefits such as:
    • Preventing fire incidents
    • Ensuring legal compliance
    • Reducing insurance premiums
    • Providing peace of mind
    • Contributing to community resilience
  • Q: How long does it take to get coverage for theft?

    Ans: The insurer will provide coverage for the loss caused due to theft within 7 days from the occurrence of the specified peril.
  • Q: Is there an option to increase the sum insured limit for inbuilt covers under the Fire policy?

    Ans: At present, as per IRDAI guidelines, there is no option to increase the sum insured limit in the inbuilt covers.
  • Q: What kind of commercial enterprise can opt for a fire insurance policy?

    Ans: The following types of enterprises should opt for a fire policy:
    • Retail Stores
    • Restaurants
    • Offices
    • Warehouses
    • Hotels
    • Shopping Malls
    • Healthcare Facilities
    • Agricultural Businesses
    • Educational Institutions
    • Manufacturing Plants
  • Q: How much does the buyer have to pay to purchase a fire insurance policy and how is the premium calculated?

    Ans: The premium of the fire insurance depends on the following factors:
      • The sum insured chosen by the buyer
      • Nature of insured property, plant & machinery, building, stocks, etc.
      • History of claims
      • Nature of insured business
      • Risk profile of the business

    Note: For an estimate of the premium amount, you may use a factory insurance premium calculator.

  • Q: Can the insured make changes in the policy during the policy tenure?

    Ans: Yes, the insured can make changes to the coverage part of the fire and burglary insurance policy. They can add or remove any particular add-on that will increase or decrease the premium amount accordingly. This will only be effective when the insurer accepts it and the insured has paid the additional amount for the added coverage.
  • Q: How to choose the right fire policy?

    Ans: Here are the things that you should consider while choosing the right fire insurance policy for your business:
    1. Evaluate your coverage needs
    2. Understand policy types and exclusions
    3. Compare premiums and claim processes
    4. Consider insurer reputation
    5. Explore additional coverages,
    6. Assess the risks and financial stability of the insurer
    7. Seek professional advice if needed.
  • Q: For which assets does fire insurance provide cover?

    Ans: The scope of fire insurance or warehouse insurance encompasses coverage for various aspects related to fire-related incidents. It typically includes:
    • Buildings and structures
    • Office equipment and furniture
    • Machinery and equipment used in manufacturing or production processes
    • Inventory or stock stored on the premises
    • Electronic devices and technology infrastructure
    • Business interruption losses because of fire-related closure
    • Pipeline located inside or outside the compound
  • Q: What are the advantages of fire insurance?

    Ans: The advantages of fire policy are as follows:
    • Fire policy covers property damage from fire, reducing financial burden.
    • It enables businesses to operate after fires, minimizing revenue loss.
    • Covering repair or replacement costs preserves asset value.
    • It reassures the insured, allowing focus without worry.
    • Including legal expense coverage and liability claims.
    • Tailored to specific needs with additional protections.
  • Q: What are the 12 perils of fire insurance?

    Ans: The 12 perils of the fire insurance policy are as follows:
    • Natural calamities 
    • Lightning 
    • Riots, Strikes or Terrorist Activity
    • Aircraft Damage
    • Subsidence and Landslide
    • Fire
    • Missile Testing Operations
    • Leakage from Automatic Sprinkler Installations
    • Bush Fire
    • Bursting / Overflowing of Water Tanks, Pipes and Apparatus 
    • Impact Damage 
    • Explosion / Implosion
  • Q: Can businesses customize their fire insurance policies to include specific perils not covered under a standard policy?

    Ans: Yes, businesses can tailor fire policies to include additional perils, such as earthquakes, by adding riders or endorsements.

    While this alteration enhances coverage, it may also increase the premium. Hence, consulting with insurance professionals can help businesses effectively tailor their policies for optimal risk management. You can also connect with our experts at Policybazaar for Business for personalized assistance.

  • Q: What is under insurance in fire insurance?

    Ans: Underinsurance in fire insurance happens when your property is insured for less than its actual value. If a fire occurs, the insurance payout won't cover the full cost of repairs or replacement, leaving you to pay the remaining expenses.

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Policybazaar for Business - Fire Insurance - Customer Reviews
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4.3/5
Based on 83 reviews
4.3
out of 5
Based on 83 reviews
13 users
66 users
4 users
0 users
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4.8 October 09, 2022
Aaftab
Amazing Customer Support
I am using a fire insurance policy from policybazaar and experienced amazing feedback from them in claim settlement. I have a sports merchandise shop that caught fire last yearI raised a claim which was resolved within a few days without any hassles.
Thiruvananthapuram
4.8 October 08, 2022
Balachandar
Helpful Support
The support team of Policybazaar is really helpful and prompt. They solve all your queries fast. Would definitely recommend Policybazaar for purchasing insurance .
Mangaluru
4.8 October 07, 2022
Raahim
Extensive Cover
Got a fire insurance policy for my shop and it was really extensive with so many features. Purchased it from Policybazaar without paying any commission fees. Great coverage.
Bengaluru
4.5 October 06, 2022
Aadi
User Friendly Website
We deal in the cotton industry and suffered a huge loss last year because of the fire. We were looking for insurance to safeguard us financially from any such incident in the future. We landed on the policybazaar website and bought fire insurance. Their website is well managed and gives all the necessary information.
MP
4.8 October 05, 2022
Rohit
Plans Are In Budget
Had to purchase a fire insurance which should be in my budget as I run a very small store. Got a lot of affordable plans on Policybazaar and purchased the one that suited my budget. All plans are in budget and with so many features.
Bhopal
4.3 October 04, 2022
Baban
Covered My Shop
I have a shop of garments and it caught fire last year in which I lost items worth thousands. Purchased a fire insurance from Policybazaar and now I feel really relieved that it would financially cover my shop in such circumstances.
Chandigarh
4.3 October 03, 2022
Aarnav
Faster Claim Settlement
A part of my warehouse having thousands of material caught fire. Luckily I had a fire insurance policy that I could claim and received compensation from them. It was such a relief. The claim settlement team at Policybazaar is helpful and really quick.
Assam
4.5 October 02, 2022
Jagadish
Affordable
I have a warehouse of clothes and was planning to buy a fire insurance policy to cover my material from unwanted fire. Got a really affordable plan from Policybazaar with some really great features.
Ahemdabad
4.5 October 01, 2022
Rahul
Budget Friendly
Wanted to cover my crockery shop from fire and was searching for an affordable plan. Found a great plan at Policybazaar which suited my budget.
Surat
4.5 September 30, 2022
Baabul
Instant Purchase
Wanted a fire insurance policy for my crockery business and could purchase it instantly from Policybazaar. The process was quick instant and very easy.
Gurgaon

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    +Premium varies on the basis of Occupancy, Business Activity & Coverage Type . The premium of Rs 3400/year is for a pucca building with sum insured of Rs 50 lakh at selected locations, for property age less than 25 years and policy term of 1 year, rounded off to nearest 10. Additional premium is payable for the optional covers including contents opted. STANDARD TERMS AND CONDITIONS APPLY. For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale.
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