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Standard Fire Insurance Company (The)

Standard Fire Insurance Company (The)

Standard Fire Insurance Company is a safety net, offering reassurance and protection against unforeseen disasters. Fire insurance is one of the most important types of insurance available, protecting individuals and companies against the terrible effects of fire-related calamities.

While knowing that such insurance exists is comforting, understanding the complexities of the claim settlement and procedure is equally important.

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What are the elements of fire insurance?

Characteristics of Fire Insurance

Insurable interest. Fire insurance requires the insured to have an insurable interest in the property being insured.

  • Maximum Trust…
  • Contract of Indemnity…
  • Individual Insurance Contract…
  • Personal Right…
  • Direct Cause of Loss…
  • Property description.

Period of Standard Fire Insurance Company Coverage:

Fire insurance is an annual policy that is typically renewed each year.

  1. Long-term policies (for a minimum of three years) can be considered for covering ‘dwellings’ only with appropriate premium discounts.
  2. In exceptional cases, coverage for STFI and RSMD dangers can be considered during currency (where they are eliminated at inception by choice).
  3. The policy can be cancelled at any point during the currency with a full refund of premiums for the unused period.

Location of risk

  • At the outset, the proposer must describe all sites where the properties are built, installed, stored, or kept.
  • Any change in risk location should be covered upon notification of such change.
  • Changes in ownership of insured property must be reported so that a suitable endorsement can cover the new owner.
  • Any significant change in the location of the risk, trade, or manufacturing activities must be reported to the insurer so that the changes can be authorized to provide continuous coverage.

Standard Fire Insurance Company Scopes

Covered properties include:

All of the proposer’s moveable or immovable properties on land (excluding those in transit) are commonly classified as follows:

1. Structure (includes plinth and foundations, if necessary):

  • Whether completed or under construction (excluding land value).
  • Interiors, partitions, and electricals are all examples of this.

2. Plant and machinery, equipment and accessories (including required foundations)

  • Purchased second-hand.
  • purchased new.
  • obsolete machinery.

3. Stocks:

Raw materials, finished goods, in process, in the trade of a wholesaler, manufacturer, and retailer.

4. Additional Contents, such as:

 Furniture, Fixtures, and Fittings

Cables, piping, spares, tools, and household supplies, and so on.

5. Specific items, such as gold,

unset precious stones, curios, works of art, manuscripts, plans, drawings, securities, obligations or documents, stamps, coins or paper money, cheques, and books of accounts.

Special Sorts of Policies Available For Stocks:

1. Declaration Policy:

To address the frequent swings in stock prices/values. The minimum sum insured is INR 1 core per location. Monthly declarations on any of the following grounds must be submitted by the last day of the next month.

a. Average of the greatest values at risk on each day (or)

b. Maximum worth on every day of the month.

Refund of premium based on average declaration of up to 50% of provisional premium upon policy expiration.

2. Floater Policy: 

To deal with frequent variations in values at different locations.

A single sum is guaranteed for all stocks in all locations.

Nominal premium loading for all stocks in all locations.

Perils Treated:

  • Fire
  • Lightning
  • Implosion or explosion
  • Damage to aircraft
  • Riot, Strike, and Malicious Damage (hence referred to as RSMD Perils)
  • Storm, Tempest, Flood, Inundation, Hurricanes, Cyclone, Typhoon, and Tornado are all examples of natural disasters.
  • Impact with rail/road vehicle or animal
  • Landslip, including rockslide.
  • Water tanks and apparatus burst and/or overflow.
  • Automatic Sprinkler Installation Leakage.
  • Missile Testing Mission.
  • Pollution or contamination caused by any of the aforementioned hazards
  • Any insured peril caused by pollution or contamination.
  • The Bush Fire.

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Ten (10) Steps to Claim Settlement Process in Standard Fire Insurance Company

The processes involved in the claim settlement process in fire insurance

The claim settlement process in fire insurance includes several important aspects. If you have fire insurance and need to file a claim, the easy steps explained below are designed to help you rapidly settle your claim.

1. Calculate the Losses

It is necessary to assess the overall loss in order to be fairly paid. Attempt to keep track of all losses suffered as a result of the occurrence. While doing so, ensure that:

  • The burned products are not dumped.
  • It is not essential to rebuild or repair the damaged infrastructure. 
  • Proper documentation of the damaged or lost objects should be kept.

Also Read: How to Get Insurance to Pay for Roof Replacement: Best Way…

2. Inform Your Insurance Company

The first step is to contact your insurance company or agent as soon as the fire incident occurs. You can notify them of the loss by calling their toll-free number or writing to them.   Reporting the incident as soon as possible is critical, as most policies have a time limit for filing claims.

3. Submit a claim

You must complete a claims form provided by your insurer. This form usually includes information about the incident, such as the date, time, and location, as well as a description of the damage, loss, or injuries.

You may also be asked to provide supporting documentation, such as the police report or FIR (if applicable) and photographs of the damage.

4. Evaluation of claims and loss estimation

The insurance provider will designate a surveyor to evaluate the amount of the damage after receiving your claim. The surveyor will go to the fire scene to assess the damage and ascertain whether your policy covers it.

5. Review of policies

The insurance provider will examine your policy to ascertain the coverage limitations, costs, and any relevant exclusions or endorsements that might affect your claim.

6. Offer for claim settlement

Following the completion of the aforementioned procedures, you will get a claim settlement offer from the insurance company. The amount they are willing to pay to offset the losses is stated in this offer, less any applicable deductibles and depreciation.

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7. Dialogue (if necessary)                 

If you feel the settlement offer is insufficient or if there are issues over the coverage, you may engage in discussions with the insurance carrier.

8. Approval of Resolution

You may accept the settlement sum if both parties agree. When you accept the offer, the insurance company will issue the payment.

9. Fund Disbursement

The insurance company will make a payment, usually in the form of a cheque, to meet the authorized claim amount. This money can be used to repair or replace damaged property, as well as to cover other qualified expenditures.

10. Make a Closure Request

The claim will be considered closed once you have received the reimbursement and used it to cover the damages. Keep track of every transaction pertaining to the claim for your own documentation.

Note: It’s always a good idea to get advice from your insurance agent or company and clarification throughout the process.

Documents Required By The Insurer For Processing the Claim For the Standard Fire Insurance Company:

1. Documents that are used in all claims under a Standard Fire and Special Perils Policy:

  • A true and certified copy of the policy, including the schedule and endorsements or clauses.
  • Form of Claim.
  • Any newspaper coverage of the occurrence.
  • Photographs.
  • Previous claims experience.

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2. Fire Claims (extra paperwork)

  1. Report of the Internal Committee formed to investigate the cause of the fire.
  2. Report of the Fire Department.
  3. First Information Report / fully endorsed letter of notification to the Police Station or Police Panchnama.
  4. Report from a forensic laboratory on samples collected at the impacted site.
  5. Drug Inspector’s Report on Drug/Pharmaceutical Item Destruction (only for pharma claims).
  6. The final investigation report.
  7. Action taken in response to TAC/LPA recommendations for loss minimization in prevention.

3. Flood Claims (extra documents):

Meteorological Report

4. Explosion Claims (extra documents):

Factory Inspector’s Report or Director of Industrial Safety and Welfare’s Report.

What is a fire insurance policy?

A policyholder with standard fire insurance is protected against loss caused by fire as well as damage from various other sources.

These include lightning and natural disaster-related fires, as well as electrical fires caused by malfunctioning wiring and gas explosions.

Who can take the policy?

Any individual/firm/organization/institution who may suffer financial loss as a result of the operation of insurable perils may insure such property under the fire policy.

They can be broadly classified as follows:

  • Owners of buildings and contents such as household items, furniture, and so on.
  • Shop owners.
  • Institutions of higher learning and research.
  • Hotels, boarding and lodging establishments, hospitals, clinics, and other similar service providers.
  • Firms in the industrial and manufacturing sectors.
  • Bailees, Lessors, Lessees, Banks, Financial Institutions, Mortgagors, and Mortgagees are all examples of bailees.
  • Stock market participants.
  • Charitable Institutions Trustees.
  • Transporters and C&F agents are two types of companies.

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Expenses:

  • Fees for Architects, Surveyors, and Consulting Engineers (over 3% of the claim amount)
  • Debris Removal (more than 1% of claim amount)
  • Forfeiture of rent.
  • Insurance for additional rent expenses for alternative housing.
  • Start-up costs.

How To Select The Sum Insured?

A property’s sum insured should correspond to its market value.

When more than one building (and its contents) is insured under a single policy, block-wise values for the building, plant and machinery, stocks, and other contents must be provided.

If the value of a property rises due to factors such as increases in prime cost, exchange rate, and so on during the policy’s currency, the corresponding sum insured may be increased upon payment of a proportionate premium.

Similarly, any reduction in the sum insured due to currency fluctuations may occur, for which a premium refund will be granted on a limited basis.

Summary

The Standard Fire Insurance Company is a provider of insurance that primarily covers fire-related disasters. It operates in the domain of property insurance, offering policies that protect against fire-related losses, such as damage to buildings, residences, and other structures.

Also Read: How to Get Insurance to Pay for Roof Replacement: Best Way…

As a significant insurer in the property insurance business, the company focuses on decreasing financial risks connected with fire-related perils for policyholders by providing coverage and compensation for fire-related damages as specified in their insurance policies.

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