Taking insurance policies is a frequent measure adopts to deal with such events. One such policy known as fire insurance is taken to reduce the individual economic loss due to obliteration of goods and possessions due to fire.
Fire insurance is an agreement between two parties, the insurer and the insured. The insurer refers to the insurance company and the insured refers to the person taking the insurance policy. As per the contract, the insurer for an agreed amount indemnifies the insured for the economic loss caused due to fire.
At the same time, it is the duty of the insured to take all possible measures to save goods from destruction at the time of mishaps. He should not be slapdash and laid back thinking that he can claim his loss from the company.
Furthermore, the insured will be remunerated for the amount equal to the value of the loss. This is to make sure that the insured cannot make any profit out of the situation. The possessions or goods against which the recompense is paid will be taken by the company. Any profit made from the sale of shattered goods belongs to the company and not to the insured.
One more vital point is that to claim insurance money, the instant cause of destruction should be fire only. That is, the loss must be caused by fire flames and not only due to rising temperature. Even in a real case of fire, the company takes all probable measures to make sure that the fire was unintentional and not purposeful. Only then, it begins with the claim procedures.
The insured party can also enter into co-insurance to extend the consideration between different insurance companies. In such cases, all the companies will proportionately share the amount of loss in a manner that the consideration should not exceed the actual loss. Such contracts are ideal for large manufacturing organizations who take the policy of a very large amount.
In an agreement of insurance, it is the ethical duty of the insured to reveal all material facts that can have an effect on the provisions of the agreement.