Fire insurance is property insurance covering damage and losses caused by fire. The purchase of fire insurance in addition to homeowner’s or property insurance helps to cover the cost of replacement, repair, or reconstruction of property, above the limit set by the property insurance policy. Fire insurance policies typically contain general exclusions, such as war, nuclear risks, and similar perils.
Insurance that offers protection of your property against fire-related damages is called ‘Fire Insurance’. However, this insurance is completely different from property insurance where the inclusion list includes the expenses incurred during reconstruction, repair or replacement of not only the insured property, but also nearby affected structures if any. Other coverage’s include damage to the personal property other than the insured and expenses of those who are affected due to the property damage.
Fire and Special Perils: This covers the home and contents against Fire, Lightning, Explosion/Implosion, Riot, and Strike, damage due to Terrorist, Storm, Flood, Earthquake, Volcanic Eruption and other disasters.
The sum insured for the structure of the house is calculated on the Reinstatement Value. The home insurance policy will calculate reconstruction cost based on two parameters which are mentioned below: