Property Insurance
Standard Fire and Special Perils Insurance
Standard Fire and Special Perils Insurance is a property insurance policy that provides coverage against fire and a set of specified perils such as storms, floods, earthquakes, and riots. It is designed for businesses, industrial units, residential properties, and commercial establishments to protect buildings, machinery, stock, and other assets.
Why Standard Fire and Special Perils Insurance is essential?
- Protection Against Fire Hazards
- Covers Natural Disasters
- Safeguards Commercial & Industrial Establishments
- Mandatory Requirement for Loans & Leases
- Avoids Financial Burden in Case of Unexpected Losses
- Offers Business Continuity & Stability
- Customizable Coverage Options
- Protects Residential Properties & Personal Assets
- Cost-Effective Risk Management
- Peace of Mind & Long-Term Security
Important Things You Should Note
- Coverage for Fire and Allied Perils – The policy covers damages caused by fire, lightning, and other specified perils.
- Policy Can Be Customized – Additional covers (add-ons) can be purchased to extend coverage.
- Sum Insured Should Match the Asset Value – Underinsurance can lead to partial claim settlement.
- Exclusions Apply – Certain risks such as war, nuclear hazards, and normal wear and tear are not covered.
- Premium Depends on Risk Factors – Location, type of property, and risk exposure affect the premium.
- Claim Settlement Based on Market or Reinstatement Value – The claim amount may be based on market value (depreciation applied) or reinstatement value (replacement cost).
- Applicable for Different Sectors – This policy is available for residential, commercial, and industrial properties.
- Multiple Add-ons Available – Add-ons like earthquake cover, terrorism cover, and escalation cost cover can be included.
- Requires Regular Renewal – Timely renewal is necessary to maintain uninterrupted coverage.
- Adherence to Safety Norms – Compliance with fire safety regulations may be required by insurers.
What is covered & what is not covered?
Coverages
- Fire: Damage or loss caused by fire, including damages from flames, heat, and smoke.
- Lightning: Damage resulting from lightning strikes.
- Explosion: Losses caused by explosions, such as gas explosions.
- Aircraft Damage: Damage to property resulting from the impact of an aircraft or any article dropped from an aircraft.
- Flood and Inundation: Coverage for damage due to floods and inundation caused by the overflow of water bodies.
- Impact Damage: Damage caused by the impact of vehicles, animals, falling trees, or objects.
- Subsidence and Landslide: Damage due to subsidence of the land, landslides, or rockslides.
- Bursting or Overflowing of Water Tanks, Apparatus: Coverage for damage caused by the bursting or overflowing of water tanks, pipes, or appliances.
Not Covered
- War and Nuclear Risks: Damage or loss resulting from war, nuclear explosions, and related perils are usually excluded.
- Intentional Acts: Damage caused intentionally by the policyholder or any person with the policyholder's consent is generally not covered.
- Neglect and Poor Maintenance: Losses resulting from neglect, poor maintenance, and lack of care are often not covered.
- Aircraft Damage: Damage to property resulting from the impact of an aircraft or any article dropped from an aircraft.
- Terrorism: Damage caused by acts of terrorism may require separate coverage and is usually excluded.
- Consequential Loss: Indirect or consequential losses, such as loss of profit or loss of use, are usually not covered.
- Illegal Activities: Losses resulting from illegal activities or non-compliance with regulations and laws are typically excluded.
- Damage to Property Outside the Premises: Damage to property located outside the insured premises may require additional coverage.
FAQs
What are the assets that can be covered under fire insurance?
Building and contents such as Household articles and equipment, Furniture, fixtures, fittings, Machinery, stock whether owned or held in trust.
What is the duration of policy?
SFSP policies are annual policies issued for one year. Longer term policies can be availed for dwellings or residential property.
How do I fix the sum insured?
Sum insured is the value for which the asset is insured. It is to be decided by the proposer considering the value of assets on Market value (M.V) or Reinstatement value basis (RIV).
What is reinstatement value?
Reinstatement value is the cost of replacement of the asset that is considered for compensation in case of loss or damage to the property subject to ceiling of Sum insured Under this settlement, no depreciation is levied.
Can the contents alone be covered in fire insurance?
Yes. But all contents to be insured without selection.
