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Best Fire Insurance Plan in India?

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Best Fire Insurance Plan in India?

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The house you bought or the one which took years to build can all be undone in a matter of minutes if a fire took place. Corporate offices and tech parks have routine fire drills to train people how to handle themselves in the event of a fire. Having fire insurance for your building has now become a vital checkpoint when new buildings come up. What does fire insurance provide? Let’s find out.

What is fire Insurance?

As the name says, fire insurance is a type of property insurance that covers loss and damage resulting from a fire. In addition to the home insurance, signing up for fire insurance covers the costs of repairing, replacing, or rebuilding structures that may exceed the limit specified by the home insurance.  It includes other perils like explosion, implosion, storm, earthquake, etc.

What is the scope of fire insurance? 

Fire insurance covers all losses resulting from an unintentional fire, subject to the terms and conditions of the fire insurance, which is limited by the policy value rather than the level of damage incurred by the property owner. Losses that are generally covered include:

  • Actual products lost as a result of fire
  • Additional living costs resulting due to personal property damage
  • Loss to neighbouring buildings or property caused by a fire in the insured building
  • Compensation for firefighters
  • Electricity causing a fire
  • A water tank or pipe overflow

Types of fire insurance

Initially, insurance companies were allowed to sell customisable fire insurance to customers by either altering the sum assured, the features offered, giving discounts etc. This led to a lot of confusion in the minds of consumers, and many of them were unable to claim the insurance as a result of the above alterations. 

Recently, the IRDAI announced changes to fire insurance, clubbing them into three broad categories with minimum room for changes by the insurance providers.

  1. Bharat Griha Raksha - This policy will cover the home building and the home content and will provide coverage against all fire perils mentioned earlier. It will provide coverage of home contents upto 20% of the sum assured.
  2. Bharat Sookshma Udyam Surakhsa - This will cover the building, assets, plant and machinery to a maximum amount of ₹5 crores.
  3. Bharat Laghu Udyam Suraksha - This will cover the assets and the building of a value higher than ₹5 crores but not more than ₹50 crores.

How to choose the best fire insurance policy in India?

Since the IRDAI has standardised the features of fire insurance, it is highly advised that you purchase fire insurance since the process of understanding what all will be covered is now the same across all companies. Keep the following tips in mind:

1. Make sure you choose the right coverage

It's important to have the appropriate insurance coverage when it comes to fire insurance. It is essential to choose the appropriate insurance because the goal of insurance is to compensate the policyholder in the event of a loss. Make a list of all the things you want to insure in order to make sure you get the right coverage amount. If you are the building owner, you must also buy fire insurance for the building's structure.

2. Keep an eye on the exclusions

While it's important to understand what a fire insurance policy covers, it's just as important to understand what it doesn't. The insurance may deny the claim in certain circumstances. For instance, when a fire breaks out owing to negligence, a war, or other external dangers.

In a similar manner, the fire insurance provider is not responsible for covering the loss or damage if one of its employees is involved in the fire and its spread.

Understand the fire insurance policy's exclusions thoroughly to prevent the circumstance where your insurer might deny your claim.

3. Take smart measures and cut down on premiums

The insurer would be curious to know what safety measures you have implemented in your place before approving the fire insurance policy. Smoke detectors, fire extinguishers, and other safety measures can assist you in giving lesser premium rates.

4. Do your homework

You can get a fire insurance plan that is reasonable by carefully comparing the many fire insurance quotes you've received from various property insurance firms.

Best fire insurance policies in India 

Take a look at some of the best fire insurance plans available in India: 

Name of the Fire Insurance plans 

Features & benefits

HDFC Ergo - Standard Fire & Special Perils

Insurance Policy

  • Provides coverage for risks associated with fire, explosions, lightning, floods, storms, strikes, riots, and malicious damage
  • Offers up to 15 years of protection
  • You can avail a discount of up to 50%
  • Option to cover earthquake and terrorism is available
  • Offers freedom for policy customization 
  • No paperwork is required to obtain an online policy.

Tata AIG Insurance - Standard Fire and Special Perils Policy

  • The standard cover offers protection against fire, lightning, flood, riot, malicious damages, explosion, and a lot of other events
  • Offers a wide range of Add-on covers
  • Covers the cost of reconstruction

NIC - Standard Fire and Special perils Policy

  • The policy insures the building as well as its contents(furniture, machinery, etc)
  • It provides protection against 12 perils
  • Minimum sum insured is INR 1 crore
  • Floaters are available to enhance the protection.

SBI General Insurance - SBI General Bharat Sookshma Udyam Suraksha Policy

  • Offers coverage up to INR 5 crore
  • Coverage is available for building, stocks, machinery, furniture and fixtures
  • Covers against earthquake and terrorism
  • Floater and declaration is available for stocks.

ICICI Lombard - ICICI Bharat Sookshma

Udyam Suraksha

  • The policy covers physical loss or damage of insured property
  • The coverage extends to machinery, stocks, plant and other assets
  • You’ll get 24*7 claim assistance
  • A specialised team available for risk mitigation.

Frequently Asked Questions

1. Which company is best for fire insurance?

It is difficult to choose one fire insurance company over the rest. India’s insurance regulator, IRDAI, has standardised fire insurance policies to a large extent. Yet there are certain differences in the features that make some policies more attractive based on your specific needs. You should research and compare different fire insurance policies available depending on your requirements to find out the one best for you.

2. Which policy is common in fire insurance?

Fire insurance is available in three categories depending on the sum insured. The coverage offered by the Bharat Sookshma Udyam Suraksha is common and offered by the other two policies as well - Bharat Laghu Udyam Suraksha and Standard Fire & Special Perils.

3. Which house insurance is best in India?

There are many home insurance policies offered by the different insurance companies in India to protect your house from a natural disaster. The best house insurance is subjective and depends on your requirements. Research and compare the various house insurance policies available and select the one best for your specific needs.

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