A contract of insurance coming insurance protection enters into a contract with the insurer to indemnify him for loss of property by or incidental to fire and or lightening, explosion, etc. This is primarily a contract and since as is governed This principles are common in all insurance contracts and are governed by special principles of law .
FIRE INSURANCE:
According to S. 2 (6 A), "fire insurance business" means the business of effecting, otherwise than incidentally to some other class of insurance business, contracts of insurance against loss by or incidental to fire or other occurrence, included included among the risks insured against in fire insurance business.
According to Halsbury, it is a contract of insurance by the a certain extent and subject to up to a certain extent and subject to condition to loss or damage by fire, which may happen to the property of the secured during a specific period.
Thus, fire insurance is a contract where the the person, seeking insurance protection, enters into a contract with the insurer to indemnify him against loss of property by or incidental to fire or lightning, explosion etc. This policy is designed to insure one & # 39; s property and other items from loss occurring due to complete or partial damage by fire.
In its strict sense, a fire insurance contract is one:
1. Whose principle object is insurance against loss or damage occurred by fire.
2. The extent of insuurer & # 39; s liability being limited by the sum assured and not necessarily by the amount of loss or damage sustained by the insured: and
3. The insurer having no interest in the safety or destruction of the insured property apart from the liability undertaken under the contract.
LAW GOVERNING FIRE INSURANCE
There is no statutory enactment governing fire insurance, as in the Indian Marine Insurance Act, 1963. The Indian Insurance Act, 1938 primarily dispute with regulation of insurance business as such and not with any general or special 1872. in the absence of any legislative enactment on the subject, the courts in India have in dealing with the topic of fire insurance have relied so far on judicial decisions of courts and opinions of English Jurists.
Prima facie that value was measured by reference of the property of damaged or destroyed by fire of insurance, it was measured. Such a method of assessment was not applicable in the market value did not represent the real value of the property to the insured, as where the property was used by the secured as a home Or, for carrying business. In the case of Lucas v. New Zealand Insurance Co. Ltd. [1] where the assured property was purchased and held as an income-producing investment, and there before the court held that the proper measure of indemnity for damage to the property by fire was the cost of reinstatement.
INSURABLE INTEREST
Such a person can ins assert the property against fire.
If you do not exist at the moment of the contract it can not be at the moment of the contract it can not be the subject - matter of the insurance and if it does not exist at the time Therefore, where he sells the insured property and it is damaged by fire thereafter, he suffers no loss.
RISKS COVERED UNDER FIRE INSURANCE POLICY
Section 64-VB only lays down broadly that the insurer can not assume the risk prior to the date of receipt of premium. Rule 58 of the Insurance Rules, 1939 speaks about advance payment of premiums in view of sub-section (!) Of Section 64 VB which enables the insurer to assume the risk from the date onwards. If the proposer did not desire a particular date, it was possible Precisely, therefore, that the final acceptance is that of the assured or the insurer depends simply on the way in which negotiations for insurance have progressed. though the following are risks which seem to have covered Fire Insurance Policy but are not entirely covered under the Policy. Some of contentious areas are as follows:
For eg, paints or chemicals in a factory undergoing heat treatment and it is not treated as it is under treated any damage or its own fermentation, spontaneous combustion or its under fermentation. Further, burning of property insured by order of any Public Authority is excluded from the scope of cover.
LIGHTNING: Lightning may result in fire damage or other type of damage, such as a roof broken by a falling chimney stuck by lightning or cracks in a building due to a lightning strike. Both fire and other types of damages caused by lighting are covered by the policy.
AIRCRAFT DAMAGE: The loss or damage to property (by fire or otherwise) directly caused by aircraft and / or articles dropped there from is covered. Destruction or damage generated from pressure waves caused by aircraft traveling at supersonic speed is excluded from the scope of the policy.
Is constrained to be a riot, strike or a terrorist activity. Unlawful action would not be covered under the policy.
STORM, CYCLONE, TYPHOON, TEMPEST, HURRICANE, TORNADO, FLOOD and INUNDATION: Storm, Cyclone, Typhoon, Tempest, Tornado and Hurricane are all different types of violent natural disasters that are accompanied by thunder or strong winds or heavy rainfall. Flood or Inundation Flood or inundation should not be be understood in the common sense of the terms, ie, flood in river or lakes, but also accumulation of water due to choked drains would be deemed to be flood.
IMPACT DAMAGE: Impact by any Rail / Road Vehicle or animal by direct contact with the insured should not belong to or owned by the insured or any occupier of the treaties or their employees while acting in the course of their employment.
While Evidence means sinking of land or building to a lower level, Landslide means sliding down land normally on hill.
And demolition, construction, structural alterations or construction alterations or repair of any property or ground -works or excavations, are not covered.
BURSTING AND / OR OVERFLOWING OF WATER TANKS, APPARATUS AND PIPES: Loss or damage to property by water or otherwise on account of bursting or accidental overflowing of water tanks, apparatus and pipes is covered.
MISSILE TESTING OPERATIONS: Destruction or damage, due to impact or other from trajectory / projectiles in connection with missile testing operations by the Insured or anyone else, is covered.
However, such destruction or damage raised by repairs or alterations to the buildings or concessions; repairs removal or extension of the sprinkler installation; and defects in construction known to the insured, are not covered.
BUSH FIRE: This covers damage caused by burning, by arbitrary or otherwise, of bush and jungles and the clearing of lands by fire, but excluding destruction or damage, raised by Forest Fire.
RISKS NOT COVERED BY FIRE INSURANCE POLICY
Claims not maintained / covered under this policy are as follows:
o Theft during or after the occurrence of any insured risks
o War or nuclear perils
o Electrical breakdowns
o Ordered burning by a public authority
o Subterranean fire
o 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.
o Loss or damage to property moved to a different location (except machinery and equipment for cleaning, repairs or renovation for more than 60 days).
CHARACTERICTICS OF FIRE INSURANCE CONTRACT
A fire insurance contract has the following characteristics namely:
(a) Fire insurance is a personal contract
His, if his connection with the assured property ceases by being transferred to. The contract of fire insurance is so a mere a a person is a connected person with the subject of insurance is to a pass. Personal contract between the insured and the insurer for the payment of money. It is validly assigned to another only with the consent of the insurer.
(b) It is an and indivisible contract.
Therefore, where the insured is guilty of breach of duty towards the insurer in respect of one subject matters covered by the policy, the insurer can avoid the contract as a whole and not only in the subject mater, unless the right is restricted by the terms of the policy.
(c) Cause of fire is immaterial
In insuring against fire, the insured wishes to protect him from any loss or detriment which he may suffer upon the occurrence of a fire, however it may be caused. is immaterial what the cause of was was the fire was lighted improperly or was lighted properly but negligently attended to thereafter or wherever the fire was caused on account of the negligence of the insured or his servants or strangers In the absence of fraud, the proximate cause of the loss only is to be looked to.
The cause of the investment
(1). Where the fire is occurred not by the negligence of, but by the willful
(2) Where the fire is due to cause falling with the exception in the contract.
LIMITATION OF TIME
Indemnity insurance was an agreement by the insurer to confer on the insured a contractual right, which prima facie, came into existence immediately when the loss was suffered by the happening of the event insured against, to put put the insurer into the same position in There is a primary liability, ie to indemnify, and a secondary liability ie to put the insured in its pre-loss position, either by paying him a specified amount or It may be be in some way. There was not an option as to the way in which he was put the insured into pre-loss position did not mean that he was not liable to indemnify him in one way or another, The primary liability arises on the occurrence of the event from the date on the date of the loss and not on the date on which the policy was avoided and any suit filed after that time limit woul d be barred by limitation. [2]
WHO MAY INSURE AGAINST FIRE?
Only those who have insurable interest in a property can take fire insurance thereon. Property and can insure such property:
1. Owners of property, sole, or joint owner, or partner in the firm owning the property. It is not necessary that they may should possession also. Therefore a lesser and a lessee can both insure it jointly or severely.
2. The vendor & # 39; s interest continues until the conveyance is completed and if thereafter, if he has an unpaid vendor & # 39; s lien over it.
3. The mortgagor and mortgagee have both distinct interests in the mortgage property and can insure, per Lord Esher MR "The mortgagee does not claim his interest through the mortgagor, but by virtue of the mortgage which has given him an interest distinct from that of the mortgagor "[3]
4. Trustees are legal owners and beneficaries the beneficial owners of trust property and each can insure it.
5. Bailees such as carriers, pawnbrokers or warehouse men are responsible for there are safety of the property entrusted to them and so can insure it.
PERSON NOT ENTITLED TO INSURE
One person has no insurable interest in a property can not insure it. For example:
1. An unsecured creditor can not insure his debtor 's property, because his right is only against debtor personally. He can, however, insure the debtor' s life.
2. A shareholder in a company can not insure the insurable interest in any asset of the company even if he is the sole shareholder. As was the case of Macaura v. Northen Assurance Co. [4] Macaura. Therefore neither as a simple creditor nor as a shareholder had he any insurable interest in it.
CONCEPT OF UTMOST FAITH
This proposer of fire insurance is also under positive a duty to make a full disclosure of all material facts and not to make any misrepresentations or misdescreptions during during the negotiations for feeding the policy. This duty to utmost good faith on the observe utmost good faith is ensured b requiring the proposer to declare that the statements in the proposal form are The insurer can then rely on. The insurer can then rely on. The appropriate premium and accept the risk or decline it.
Thus the proposer is not too to the insurer to know in order to assess the position and fix the premium, that is, all material facts. give information relating to:
o The proposer & # 39; s name and address and occupation
o The description of the subject matter to be assured sufficient for the purpose of identifying it including,
o A description of the locality where it is situated
o How the property is being used, for any manufacturing purpose or hazardousous trade.etc
o Whether it has already been insured
o And also ant personal insurance history including the claims if any made buy the proposer, etc.
Apart from questions in the proposal form, the proposer should disclose any questioned or not-
1. Any information which would indicate the risk of fire to be above normal;
2. Any fact which may indicate that the insurer & # 39; s liability may be more than normal can be expected such as existence of valuable manuscripts or documents, etc, and
3. Any information piece on the more; hazard involved.
The proposer is not obligated to declare-
1. Information which the insurer may be presumed to know in the ordinary course of his business as an insurer;
2. Facts which tend to show that the risk is less than otherwise;
3. Facts as to which information is waived by the insurer; and
4. Facts which need not disclosed in view of a policy condition.
Making full disclosures of material facts which may be relevant to the insurer to take into account While deciding whether the proposal should be accepted or not.
DOCTRINE OF PROXIMATE CAUSE
In many cases, the doctrine of proximate cause helps to determine the actual. cause of the loss.
Proximate cause was defined in Pawsey v. Scottish Union and National Ins. [5] "It is dominant and effective cause even though it is not the interaction of any force started and work actively from a new and independent source. nearest in time. it is necessary necessary when a loss occurrence to investigate and ascertain what is the proximate cause of the loss in order to determine whether the insurer is liable for the loss.
PROXIMATE CAUSE OF DAMAGE
A fire policy covers risks where damage is caused by way of fire. This may must absolutely lead The insurer The insurer The view that the loss was covered by the militants would not be covered by the fire policy. was liable to meet the claim is untenable, so unless and until fire is the proximate cause f damage, no claim under fire policy would be maintained. [6 ]
PROCEDURE FOR TAKING A FIRE INSURANCE POLICY
The steps involved for taking a fire insurance policy are stated below:
1. Selection of the Insurance Company:
The insurance against unforeseen events. The judgment should rest restraints on restraints like goodwill, and long term standing in the market. The insurance company can either. be approached directly or through agents, some of them who appointed by the company them.
2. Submission of the Proposal Form:
The information in the Proposal form should be given in the Proposal form should be given in good faith and must be accompanied by documents that verify the actual Most of the companies have their own personal Proposal Forms and the exact information has to be provided.
3. Survey of the Property / Consideration:
Once the duly filled Proposal form is submitted to the insurance company, it makes an "on the spot" survey of the property or the goods that are the subject matter of the insurance. This is imperative to assess the risk involved and calculate the rate of premium.
4. Acceptance of the Proposal:
Once the detailed and comprehensive report is submitted to the insurance company, the former is a thorough perusal of the proposal and the report. If the company is satisfied that their is no lacuna or foul play or fraud involved, It generally to accept that the insured to pay the first premium to the company. The insurance policy commence after the payment and the acceptance of the premium by the insured and the company, them. Insurance Company issues a Cover Note after the acceptance of the first premium.
PROCEDURE ON RECEIPT OF NOTICE OF LOSS
On receipt of the notice of loss, the insurer requires the insured to furnish details relating to the loss in a claim from relating to the following information-
Circumstances and cause of the fire;
2. Occupancy and situation of the concessions in which the fire occurred;
3. Insured & # 39; s interest in the insured property; that is capacity in which the insured claims and also any others are interested in the property;
4. Other insurances on the property;
5. Value of each item of the property at the time of loss together with proofs of people, and value of the salvage, if any; and
6. Amount claimed
The above information will enable the insurer to verify any-
(1) The policy is in force;
(2) The peril causing the loss is an insured peril;
(3) The property damaged or lost is the insured property.
Rules for calculation of value of property
The value of the insured property is-
1) Its value at the time of loss, and
2) At the place of loss, and
3) Its real or intrinsic value without any consideration for its sentimental vale. Loss of prospective profit or other consequential loss is not to be taken into account.
FILING OF CLAIMS
How a claim arises?
There may in addition one or more insured perils on an uncured property. In order that the subject must be valid the following conditions must be fulfilled:
1. The occurrence should take place to the operation of an insured peril or where both insured and other perils operated, the dominant or efficient cause of the loss must have been insured peril;
2. The operation of the peril must not come within the scope of the policy exceptions;
3. The event must have caused loss or damage of the insured property;
4. The occurrence must be during the currency of the policy;
5. The insured must have fulfilled all the policy conditions and should also comply with requirements to be fulfilled after the claim had arisen.
MATERIAL FACTS IN FIRE INSURANCE: PREVIOUS CONVICTION OF THE ACCUSED
The criminal record of an assurable can affect the moral hazard, which insurers had to assess, and the non-disclosure of a serious criminal offense like robbery by the plaintiffiff would a material non-disclosure.
INSURED & # 39; S DUTY ON OUTBREAK OF FIRE, IMPLIED DUTY
For this purpose he must (a) take all reasonable for obligation duty to observe good faith towards the insure must be his the best to avert or minimize the loss. (2) assist the fire brigade and others in their attempts to do so at any rate not come in their way.
With loss of damage the assured property may sustain in the course of attempts to combat the fire or during that removal to a place of safety etc., will be deemed to be loss locally generated by the fire.
If the insured fails in his duty willfully and then by increasing the burden of the insurer, the insured will be deprived of his right to revive any indemnity under the policy. [7]
INSURER & # 39; S RIGHTS ON THE OUTBREAK OF FIRE
(A) Implied Rights
Corresponding to the insured & insuredrs have insightrs have a right to tolerate the insurers have a right to-
o Take reasonable measures to extinguish the fire and to minimize the loss to property, and
o For that purpose, to enter into and take possession of the property.
It ins hass a liable to make good all the damage the sort of during the steps to to put it out so far in the possession, because it is considered the natural and direct consequence of the fire; held held in the case of Ahmedbhoy Habibhoy v. Bombay Fire Marine Ins. Co [8] That the extent of the damage flowing from the insured peril must be assessed when the insurer gives back and not as at the time when the peril ceased.
(B) Loss caused by steps taken to avert the risk
In the case of Liverpool and London and Globe Insurance Co. Ltd v. Canadian General Electric Co . Ltd., [9] the canadian Supreme Court held that "The loss was caused by the fire fighters" and the loss was not recoverable under the insurance policy, which covered only damage evoked by fire explosion. , and the loss was not recoverable under the insurance policy, which covered only damage raised by fire or explosion.
(C) Express rights
Condition 5 in order to protect with respect to this occurrence of this occurrence of any destruction or damage the insurer and every person authorized by the insurer may enter, take or keep possession of the building or Promises where the damage has happened or require it to be reasonable purposes like examining, arranging, removing or sell or dispose off the same for the account of which may may concern.
When and how a claim is made?
Within 15 days of the occurrence of such loss, the insured should submit a claim in writing, giving the details of damages and their estimated values. Details of other insurances on the same property should also be declared.
The Insured should procure and produce, at his own expense, any document like plans, account books, investigation reports etc. on demand by the insurance company.
HOW INSURANCE MAY CEASE?
Insurance under a fire policy may cease in any of the following circumstances, namely:
(1) Insurer avoids the policy by reason of the insured making misrepresentation, misdescription or non-disclosure of any material particular;
(2) If there is a fall or the order of part insurance building range or structure or part of the matter, then on the expiration of seven days wherefrom, except where the fall or is was not to the action of any insured peril; notwithstanding this, the insurance may be revived on revised terms if express notice is given to the company as soon as the occurrence takes place;
(3) The insurance may be terminated at any tie at the request of the insured and at the option of the company on 15 days notice to the insured
CONCLUSION
Tangible property is exposed to numerous risks like fire, floods, explosions, earthquake, riot and war, etc. and insurance protection can be against against most of these risks frequently or in.. Form in which the cover is expressed is numerous and varied The insured are under a moral and legal obligation to be at utmost good faith and should strike a fire insurance in the strict sense. further insurance policies help in the development of a development nation. Hence insurance companies have a hidden to help the insured when the insured are in trouble.
REFERENCE:
1. (1983) VR 698 (Supreme Court of Vienna)
2. Callaghan v. Dominion Insurance Co. Ltd. (1997) 2 Lloyd & # 39; s Rep. 541 (QBD)
3. Small v. UK Marine Insurance Association (1897) 2 QB 311
4. (1925) AC 619
5. (1907) Case.
6. National Insurance Company v. Ashok Kumar Barariio
7. Devlin v. Queen Insurance Co, (1882) 46 UCR 611.
8. (1912) 40 IA 10 PC
9. (1981) 123 DLR (3 d) 513 (Supreme Court of Canada)
Books Referred:
1. The Economics of Fire Protection by Ganapathy Ramachandran
2. Modern Insurance Law, by John Birds
3. The Handbook of Insurance Regulatory and Development Authority Act and Regulations with Allied Laws, by Nagar
