The question of what is meant by fire insurance is what a lay man on the street is likely to ask the legal luminaries and commercial actors in the field. To really understand what is meant by a fire insurance coverage or a fire insurance policy, there is a need for the person to first of all identify the reasons behind the formation of the fire insurance company.
There has been rapid transformation of villages to towns and the gradual change of towns to cities. It is the result of increase in population which in turn has led to construction of more houses in these cities and towns which are becoming too congested. Because of this increase in houses and population, there is very high increase in the occurrence of fire incident in the midst of these congested houses. The increased population on the other hand has played a major role in inviting the fire insurance companies in our society today since many now engage in using fire equipment especially for cooking and other home needs and consumptions.
The increase in houses and the increase in population is the cause of fire occurrences or fire outbreak in many occasion and nearly in all circumstances. Thus the fire insurance is the best house insurance which every home owner needs to pursue. The home coverage entails covering the home and the properties inside the home which may also be damaged as a result of the fire incident. The people are always interested in the house fire insurance because the house is the most valuable property which need to be protected against any uncertain fire incident.
Fire insurance policy as a whole is essential because there exist industrial zones in the various countries in which you may find yourself. Since there is the rapid growth of industrialization in our society, there is need for proper management and control of possible fire outbreaks. Fire outbreaks if not limited may lead to the destruction of many homes of innocent people. The government in different countries have come up with the idea of setting industrial zones which are far away from homes as a major way of limiting the effect of fire in our society.
The governments in various states are doing a lot to fight against any outbreak of fire and to control fire extension to other nearby houses if there is an outbreak, by forming the firefighting command, national fire control associations etc. There is a need for the existence of the fire insurance company because these companies are out to look at both the retroactive or the retrospective effect of the occurrence of fire and the non-retroactive effects of the fire incident and to compensate victims of fire outbreaks.
Fire insurance is therefore the company which is out to protect and compensate the victims of fire incidents. For a victim to benefit from the fire insurance company he or she must be a member through registration. The question is how to get registered in a fire insurance company?
For someone who is interested in getting registered into the fire insurance company, he or she needs to follow the normal procedures in a general contractual agreement by first of all taking into consideration key instruments like offer and acceptance, consent, premium, the legality of object and legally binding agreements.
The fire insurance company helps in compensating victims of fire incident
Sometimes,It is only when somebody must have been injured by the outbreak of fire that he or she can understand what it means and how expensive the loss is when there is a fire occurrence especially in the case of houses as well industrial and other commercial cases. Fire insurance company being the best house insurance, is of help to the house owners and the tenants because house fire insurance depending on the agreement between the insurer and the insured, will protect the house itself and the properties inside the house. Hence the proper agreement entered into by the insured and the insurer will also lead to a proper compensation when the risk occurs
For the victim to enjoy these services from the fire insurance coverage or the house fire insurance in particular he or she must pay a particular sum of money periodically or the premium to the house fire insurance so that at the time when the fire occurs he or she will be compensated when he has followed the right procedures.
It is important to note that in this type of insurance policy, the insurance company always insists that the insured states the possible things that can lead to the outbreak of a fire. If at the occurrence of the fire incident, the company upon investigation discovers that the fire outbreak was not from the specified incident, they will not compensate the victim since the cause will not have a relationship with the contractual liability insurance agreement.
For example, a person could enter into an agreement with the house fire insurance company and the legally binding document states that the occurrence of fire must be from an electric spark in order for it to be covered. If the fire outbreak occurs in that person’s house and the house insurance company upon investigation, discovers that the victim was in possession of cooking gas bottle which caused the fire incident, the victim will not be compensated because the risk of fire incident did not occurs from the agreed specified instrument and also because the victim failed to disclose that he is in possession of the cooking gas bottles.
Somebody may not be compensated when a fire outbreakaffect s, say an entire neighborhood. This is because the fire insurance company is by its terms or general rules and regulations not responsible for mass risk which may be as the result of natural disasters like volcanic eruption or fire cause by electric power failure which affects a large number of people. For example, this scenario can be illustrated. In the City of New York in the United states of America, if there is an electric spark which leads to the destruction of a quarter of the city, the fire insurance company will not be oblige to compensate the victims because they will become bankrupt trying to.
For this reason, the companies put in place measures to avoid this type of situation by making it part of the initial agreement that they will not compensate when there is a mass fire occurrence.
Fire insurance coverage protects the businesses in our society
Businesses are protected when the owners get registered in the fire insurance policy, and it can be seen at most in every city around the world. This is because in various cities, there is usually the use of heavy electrical machines like in the industries and sales points for cooking gas and other provision stores. For these business owners who want to be secure, they will engage into the contractual agreement with the fire insurance company to transferred the large risk of the occurrence of fire incidents to the insurer in order to wipe out the fear of losses and continue with the business.
Thus this shows that the activities of the fire coverage insurance contributesto the business world through the services which any fire insurance policy or company provide by accepting to take the large part of fire risk against just a token of premium paid to the company periodically.
Also still in the business environment, the fire insurance policy helps in the country’s economic growth indirectly and directly. The company by helping other companies to grow by the way of encouragement and by taking their risk of fire incident which may come as a result of the uncontrollable forces, helps in the country’s economic growth. The fire insurance company also contributes directly to the country’s economic growth by injecting money into the economy and granting loans and by operating other enterprises using the profit gained from the premiums paid by the individuals and the public when registering into the company.
The fire insurance also protects the businesses or the enterprises by compensating the injured parties who most have been hurt by the fire incident hence leading to huge financial break through on the side of the victim. Because of this financial break through, the entrepreneurs are able to go back to the business strong and determined.
Also, fire insurance coverage helps in restoring resources which are being destroyed by fire outbreak. That is, when the fire insurance coverage compensates the victim and restore the damaged instrument or resources, it helps in the economic maintenance and stability of the economy.
The fire insurance company is important because it distributes the losses of fire incident among the various contributors
When an individual is affected by fire incident, the insurance company will not go to banks and borrow money to come and compensate the insured, but the insurer will just withdraw the money contributed by many insured persons. The contributions from these individuals are with the prior aim of helping each other when the risk occurs. For example, if one hundred thousand (100, 000) insured persons registered into fire insurance company, out of this number may be only one hundred (100) persons can at times have fire incident which needs to be compensated. Compensating these few individuals will entail that the money of other individuals who have no fire incident or who did not suffer any damage or hurt by the occurrence of fire incident will be used and the risk will automatically be shared or distributed among the injured persons.Meaning that the risk has been shared or distributed among the insured persons
Before the compensation of the victim as far as the fire insurance which is the best house insurance is concerned, the victim of the fire outbreak must be able to establish that the fire incident actually occurred. And this occurrence must cause a damage to the victim’s property or must hurt the victim himself
The fire also must be unintentional so that people do not play tricks on the fire insurance or the best house insurance by removing important and valuable items and then setting the house on fire so that he or she can gain something out of it. Thus for the fire insurance company to limit this situation, they will always fully investigate the circumstances which led to the occurrence of fire. After the investigation, they will only compensate the victim whose fire incident is as a result of unintentional happenings.
Its very important to understand that this fire insurance company is part or a type of non-life insurance policy and the characteristic of the non-life insurance also applies here. For this reason, the occurrence of the fire incident needs to be uncertain. This means that the fire incident should not be one that happens periodically.
The procedure of getting registered in the fire insurance company
The fire insurance coverage like any other type of insurance company, has its terms which the insured needs to fulfill before he or she can be compensated when the risk comes. The contractual agreement rules and regulations which is the heart or the core foundation of the relationship between the insurer and the insured need to be respected and maintained. That includes primary conditions like offer and acceptance.
Concerning offer and acceptance, the person seeking the fire insurance coverage needs to go to the fire insurance company so that he or she can make an offer for the company to see into it and decide whether to accept it or not. Another condition is acceptance which means that when a person looks for the company to protect them against risk, the company has to decide whether to agree or not thus meaning that the consent can be positive or negative.
When the company must have consented, the insurer and the insured will now have to entered into a real business. Entering into real business means that the person seeking the registration will now open up with the insurer and explain to him what the problem is. It is good to understand that here, the insured for example needs to explain and disclose all possible instrument in the house which he or she thinks can likely be a cause to fire occurrence. Making known the instruments which can cause fire incidents to the insurer creates chances of being indentified when the fire hurts him or her.
Still in the process of disclosing, the insured needs to disclose all the assets and the real prizes per important asset in the house so that the insurer can be able to tax the insured according the amount of loss he or she has to get into iffire destroys the house. The insured upon disclosing the assets needs to proof to the insurer that the assets are his or her legal assets and the insurer need to make sure that the assets are legal. For example, there cannot be a contractual agreement with the property or goods which are illegal like cocaine or marijuana etc.
When the fire insurance company is convinced with the details given by the person seeking insurance and that the assets to be insured are legal, they will levy a tax on the insured known as a premium. This tax or premium will be according to the assets disclose by the insured. The premium is usually paid periodically to the company depending on the contractual agreement.
The company on the other hand will now be oblige to also tell the insured the amount which he or she will be compensated when the fire incident occurs. This is to assure the beneficiary that he or she will be compensated when the event occurs. The promise of the specified amount to be paid is not a verbal agreement but must be documented so that the insurer should have legal grounds to indemnify and the insured should also have legal grounds to claim when the fire incident occurs. The document will then be signed by the insured and the insurer to be binding and it will automatically become an obligation for the insurer to pay or indemnified the insured if a fire incident hurts the victim or when the fire causes damage to the victim’s property.
The effect of failure to follow the right procedures
The failure to effect the procedures laid down by the general contractual rules and regulations will be in detriment of the insured since he or she will lack the legal grounds to be compensated when the risk of fire incident occurs. But taking into consideration the principles of the law of equity, if the insured was misled by the agent of the fire insurance company, he will be taken to be a bona fide purchaser. This means that he will be compensated because of the interest of justice and not because he or she possesses the legal capacity to be indemnified by the insured company.
Breach of the fire insurance contractual conditions and it effect
The breach of the contractual conditions may either be the breach patterning to the general or specific conditions. When it concerns the breach of the general conditions, the laws governing the general contract will apply. The fire insurance contract may be void and the court may also order the rescission of a contract or even the specific performance depending on the circumstances surrounding the fire breach of general conditions. On the other, hand, concerning the breach of the specified conditions between the insured and the insurer, the rules and regulations put into agreement when entering into contract will be applied.
For example, upon entering the fire insurance contract, both the insurer and the insured could agree that if the insured fails to disclose all properties in the house, only the one that he or she actually disclosed will be compensated. Therefore, if there is any fire incident in the house, the insured cannot claim any insurance coverage for assets not specified from the onset.
Fire insurance, climatic change and the place of the insured property
Fire insurance policy is the best house insurance to enter into when somebody is in fear of fire incident in the near future. But the premium to be paid by the insured varies from season to season depending on the location of the house or business place. This means that if the contractual agreement between the parties to the policy is on the house for example which is near a bush or near a forest, the premium in the dry season will be higher than the one entered into in the rainy season. Therefore, the premium will vary or change from season to season which automatically means that the change in climate will affect the fire insurance positively and negatively.
Taking into consideration the climatic changes, one must also take note of the location of the property. For example, if the property like the house is located near or in the city, there will be less effect patterning to climatic change than other areas since the climate will not affect the city as much as it will affect areas where there are bushes and low house planning.
Insurable interest in the property insured against the fire incident
Any person trying to insure a property must have an insurable interest in that property. Having an insurable interest in the property means that the party insuring his or her property must have legal rights over the property. At the occurrence of the fire incident, the victim who is having that insurable interest must suffer financial damages or damages which can be measured before he or she can be compensated.
Financial damages here mean that the damage must be capable of being measured monetary terms. For example, if the fire affects the health of the victim, the compensation will be money spent in the hospital and the money which is used for minor issues. From the above principle of the insurable interest, one cannot insure the property which is not measurable or which cannot be measured in terms of money since the insurance company deals with financial compensation.
Building are the highest properties in the whole world for which the number of persons seeking the registration into the fire insurance company keep on rising on daily bases. This is because the fire insurance policy is the best house insurance and Many people are afraid of suffering huge financial losses when there is a fire incident. Because of this fear, there is a mad rush for registration into the fire insurance company so that their large risks should be transferred to the insurer against a premium paid and in return of compensation or indemnity.