What You Should Know Before Choosing a Fire Insurance Policy

Fire insurance helps protect your property against loss or damage caused by fire and other covered risks. It gives financial support during unexpected incidents affecting buildings, stocks, or assets.

Types of Fire Insurance Policies

- Standard Fire and Allied Perils Policy (SFSP)

- Floater Policy

- Declaration Policy

- Floater Declaration Policy

What Is Covered Under SFSP

- Fire and lightning

- Explosion or implosion

- Aircraft damage

- Riots, strikes, and malicious damage

- Storms, floods, cyclones, and related natural events

- Impact damage

- Landslide and subsidence

- Water tank or pipe overflow

- Missile testing operations

- Leakage from sprinkler systems

- Bush fire

Special Policy Options

- Floater Policy: Covers stocks stored at multiple locations under one sum insured

- Declaration Policy: Useful when stock values change frequently

- Floater Declaration Policy: Combination of both above features

Common Exclusions

- War and nuclear risks

- Pollution or contamination

- Electrical breakdowns or short circuits

- Loss of profit or indirect losses

- Earthquake and terrorism (unless added separately)

- Theft after an incident (except specific covered situations)

- Damage to property moved outside insured premises beyond allowed limits

Optional Add-on Covers

- Earthquake cover

- Forest fire

- Cold storage stock deterioration

- Debris removal

- Loss of rent

- Temporary stock removal

- Leakage and contamination

- Escalation clause for inflation adjustment

Ways to Choose Sum Insured

- Normal Indemnity: Based on current market value after depreciation

- Reinstatement Value: Pays reconstruction cost without depreciation (“new for old”)

Important Things to Check

- Covered risks and exclusions

- Add-on cover options

- Correct property description

- Adequate sum insured to avoid underinsurance

Disclaimer

This is a general overview for informational purposes only. Please review the full policy wording, terms, and exclusions before choosing a policy.