Types of Fire Insurance and reasons why you need it

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Fire insurance is the kind of insurance that covers damages and losses incurred in case of a fire.
It is meant to cover property losses that you may face especially due to the fire that gartered
your property. By the end of this article, you will be able to put a difference between the various fire insurance types. And you will be able to choose what works for your company.

Here are the various types of fire insurance that you could apply for;

Valued Policy

In this situation, the insurer and the client layout an agreement in which the insurer promises
to cover any losses incurred in an event that the client’s property is lost during a fire.

Specific Policy

While drawing an agreement under specific policy, the insurer and client set a specific amount
of money which is meant to be paid by an insurer in the event of a fire damaging property.
Therefore, the payment won’t base on how much the property is worth but rather the specified
amount which was initially agreed upon.

Average Policy

Here, the property is under-insured in that it is insured for a sum that is smaller than the actual
value of the property therefore, the insurer shall only bear part of the loss in an event of a fire. This is also another fire insurance type.

Floating policy

Under floating insurance, various types of goods at different locations are insured for one
amount and one premium. Usually, the premium is an average of the premia that would have
been paid if each goods batch was insured for a specific policy for specific sums.

Excess policy

Since the stock of the insured keeps fluctuating, one can make a policy below the amount the
insurance usually falls. Later on, the insured may take another insurance policy to cover the maximum amount of stocks which their goods can reach sometime. So the former type shall be the first loss policy and the latter shall be called excess policy.

Blanket policy

This insurance policy covers assets, fixed and also current which shall all be basketed under a
single policy. This is also another fire insurance type.

Comprehensive policy

It is known as comprehensive since it has a number of covers within it which include fire, floods,
riots, strikes and burglary all for a specified some of money.

Consequential Loss Policy

This policy aims at indemnifying insurance against either loss or profit caused by any
interruption of business resulting from a fire and that’s why it’s also known as loss of profit

Reinstatement Policy

Just like the name goes, this policy pays an amount which is sufficient to reinstate assets or
property destroyed in an event of a fire. This is also another fire insurance type.

Open Declaration Policy

In this case, the insured makes a deposit with the insurer which is followed by a declaration of
the value of the subject hence the risk will be covered. This is common when the value of stocks
usually fluctuates significantly.

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