Law in India relating to Property Insurance
A home is a place, which provides every person the warmth and peace that one looks forward to at the end of a hard day’s work. However, every home can also be threatened with burglary, damages caused by natural and man-made disasters. To secure everyone’s home of any threat, the home insurance policies or property insurance policies are offered by different insurance companies which eventually provide security to the structure and/or contents of the home against unforeseen calamities.
Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, or boiler insurance. Property is insured in two main ways—open perils and named perils.
Open perils cover all the causes of loss not specifically excluded in the policy. Common exclusions on open peril policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism, and war. Named perils require the actual cause of loss to be listed in the policy for insurance to be provided. The more common named perils include such damage-causing events as fire, lightning, explosion, and theft.
Fire insurance business in India is governed by the All India Fire Tariff that lays down the terms of coverage, the premium rates and the conditions of the fire policy. The fire insurance policy has been renamed as “Standard Fire and Special Perils Policy”. The risks covered are as follows:
- Dwellings, offices, shops, hospitals:
- Industrial, manufacturing risks
- Utilities located outside industrial/manufacturing risks
- Machinery and accessories
- Storage risks outside the compound of industrial risks
- Tank farms/gas holders located outside the compound of industrial risks.
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