SPECIAL POLICIES OF FIRE INSURANCE

These are of different types based on the insurance hazards, insured risk, business type, policy rules.

Valued policy: The value of the prospectus to be insured, here, the insurer pays the total admitted value irrespective of the market value of the properties. The amount fixed may be greater or less than the actual market value of the property destroyed by fire at the time of loss. It is used for insuring especially pictures, sculptures, works of art, jewelry articles, etc. it is beneficial to the insured because he/she is relieved of proving the value of the property at the time of loss by searching for invoices and receipts. The valuation is revised at frequent intervals. The insurer will have to pay more than the actual loss if the market price of the property has gone down.

Valuable policy: is that policy where claim amount is to be determined at the market price of the damaged property. This policy represents the doctrine of indemnity.

Floating policy: is useful to cover fluctuating stocks in different localities. It is taken to cover one or more kinds of goods at one time under one sum assured for one premium, the physical and moral hazards are also varying. These kinds of policies are specifically taken by big manufacturers or traders whose merchandise might be lying in parts at the warehouse, port, or railway station. The average rate of Premium is ascertained by taking into account the total premium payable had the property been insure by specific policies. It contains ‘average’ and ‘marine’ clauses. It can be taken only on stocks and not on immovable property.

Excess policy: The stock of a businessman may fluctuate from time to time, so the insured in this case can purchase two policies, one is the ‘loss policy’ and the other is the ‘excess policy’. The minimum level of stock can be found out from the past experience and for the other portion of stock which exceeds the minimum limit. The actual value of the excess stock is declared every month. The average clause also applies to this policy.

Specific policy: Specific sum is insured upon a specific property in case of a specified period, the whole of the action loss is payable provided, but won’t exceed the insured amount. The insured sum sets a limit upto which the loss can be made good.

Average policy: Policy containing ‘average clause’ is called an Average policy. The amount of indemnity is referred to the value of the property insured. If the policy holder has taken policy for a lesser amount than the actual value of the property, the insured will be deemed to be his own insurer for the amount under insurance. The average clause is operative only. It is ineffective when the property is insured for the full value as in that case the insured is protected to the extent of his total loss.

Comprehensive policy: This policy undertakes full protection against risk of fire combined with burglary, riot, civil commotion, theft, lightning. This policy is beneficial to the insured and the insurer. The insurer can set higher premium and the assured is protected against losses due to specified perils.

Sprinkler leakage policy: This policy insureds the destruction or damage to by water accidentally discharged or leaking form automatic sprinkler installation in the insured premises.

Add on covers policy: An insured may like to cover his prospectus against to delete some of the exclusions. The additional cover is effected is included specific perils also. For example earthquake. Add on the cover is mid-term inclusion but the annual premium has to be charged and not short period premium. No refund of premiums for the cancellation will be allowed unless the entire policy is cancelled.