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FIRE INSURANCE CLAIM CASES

few insurances claim cases which have been rejected because of the specific reasons . these cases m,ay be of interest to general public so as to evaluate their loss and compare. the insured to have a real time assessment of the claims and to analyze why claims are rejected and, if there is a way how they can prevent the same happening to their claim.
 
REASONS OF CLAIMS REJECTIONS
  1. the cause of loss is not covered under the policy
  2. the loss falls with in a specific exclusion
  3. lack of insurable interest.
  4. the insured property is not eligible to be covered under SFSP insurance
  5. the loss has occurred at a location which is not held covered under the policy.
 
COLLAPSE OF BUILDING (CASE 1)
An insured reported a claim for collapse of a portion of the building of the poultry farm . during the survey it was found that a portion of the building of one of the sheds had collapsed. the insured could not specify any particular reason of the cause of loss.
 
EXPLOSION IN GHEE BOILING KETTLE (CASE2)
the insured reported a loss to the boiling kettle in the ghee manufacturing unit. three boiling kettles installed in the factory had exploded during operation. the insured had claimed the above loss under the peril explosion. the loss was rejected on the ground that peril explosion. the loss was rejected on the ground that the policy covers on account of explosion and not the cause of explosion itself.
this claim qualifies to be covered under MBD policy any the insured would have got the claim of the kettle had they opted for additional cover for covering the machinery breakdown.
 
FLASH AND FIRE AND POWER TRANSFORMER (CASE3)
the insured reported that there has been a fire in the transformer installed in their unit. it was found that the fire started within the transformer itself after a loud sparking and flash.th loss was attributed to failure of insulation of the transformer was damaged due to electrical breakdown . this claim qualifies to be covered under MBD policy and the insured would have got the claim of the transformer had they opted for additional cover for covering the transformer under machinery breakdown insurance.
 
CLAIM OF BURSTING OF WATER TANK (CASE4)
the insured reported that they had installed one lare plastic tank at their factory for storing the de ionized water. the tank as installed at the ground level and had capacity to store 20000 liters of water. the claim was rejected on the ground that cause of loss to the tank is not an insured peril. the tank could have been damaged due to material failure.
 
 
CLAIM OF BURSTING OF WATER TANK(CASE 5)
the insured reported that a water tank made of plastic was installed on the roof top of the unit had burst. the water so released had found it is way to the process areas and had damaged some cards of the machines and also damaged stocks under process. the insured submitted the claim amount cost of tank, cards and damaged stock.  the claim of the tank was not admitted because the cause of loss to the same is not an insured peril but subsequent loss to machine cards and stock items was paid.
 
LOSS TO MACHINERY UNDER MALICIOUS DAMAGE(CASE6)
the insured claimed that one of the workers of the factory had deliberately put some metallic object in the running machine with an intention to cause loss to the insured following which the gear box had broken and had caused a loss of app 5 lakes to the insured. the insured was conveyed that the damage was caused due to routine wear and tear of the machine and hence not covered under the policy.
 
FIRE IN CNC MACHINE(CASE7)
The insured provided a CCTV footage where the worker was seen pouring paint on the machine and setting it ablaze. the insured lodged a police complaint and terminated the services of the worker. the claim was admitted under the peril malicious act.
 
LOSS TO ELECTRONIC EQUIPMENT ON ACCOUNT OF LIGHTENING (CASE8)
the insured claimed that following thunder and lightening their computers and electronic equipment were damaged. the lightening causes heavy discharge of energy and causes extensive damage where it strikes. the loss was rejected on the ground that the loss can not be directly attributed to lightening as there was no evidence of lightening. the loss was also rejected under exclusion VIIof the policy which specially excludes loss to electrical and electronic equipment on account of leakage of current, short circuit, etc due to any reason including lightening.
 
FIRE DUE TO LIGHTENING(CASE 9)
on the other hand loss to the building which was totally burnt after lightening strike was paid by the insurer as the loss could be attributed directly to the lightening strike and covered under the policy.
 
LOSS TO STOCKS OF RICE DOC PACKED IN JUTE BAGES(CASE10)
During  survey it was found that the stocks were kept stored in a go down without any electrical fitting. the jute bags were placed in stacks on the floor. the insured could not provide any reason as to what had caused the fire . in the absence of any obvious reason of fire the cause of fire was attributed to spontaneous combustion. the loss was turned down because the loss is specifically excluded under the standard policy and it requires the insured to take add-on cover if the peril is to be insured.
 
LOSS ON ACCOUNT OF AVALANCHE(CASE 11)
An insured who has installed a rope way in higher reaches of Himalaya close to manali reported a loss to their assets on account of avalanche. the loss was denied as the avalanche is not one of the insured perils.the insured represented that it was by mistake that they had used the word avalanche but it was actually a snow storm. in this case the insurer was not liable to pay for the loss because the loss could not be attributed to any of the insured perils.
 
FALL OF CHIMNEY OF THE NEIGHBORING FACTORY(CASE12)
An insured reported that a chimney of a nearby factory had  fallen on their roof due to which the roof of the shed of the insured was damaged. the insured claimed loss under the peril Impact damage.th ensured claimed loss under the peril impact damage. another peril covers losses on account of articles dropped from the aircraft. in this case the loss was not paid as the same has not been caused due to any of the insured perils.
 
LOSS OF RESIDENTIAL BUILDING (CASE13)
An insured reported a loss to his residential building . during survey it was found that the building of the insured had developed long vertical cracks in two major walls of the house. the insured had claimed the loss under the peril subsidence. it was found that one of the immediate neighbors of the insured had constructed a new building . the loss was not paid because the loss eas not caused due to nay of the ensured perils.
 
THE LOSS FALLS WITHIN A SPECIFIC EXCLUSION 
 
  • FOREST FIRE
A factory in the hill state of himachal Pradesh reported a loss to building stocks and machinery on account of fire. during survey it was found that the fire had started in the nearby forest area and had travelled to the insured premises. the insured represented that the proximate cause of loss fire which is an insured peril further the insured claimed that bush fire is also one of the insured perils and according how the insurance company can rejected the claim.
 
  • BUSH FIRE
A similar loss was other wise paid in paper mill where the fire started in the nush and unkempt growth within their premises and subsequently travelled to stocks of waste paper and the stocks were damaged. the loss was paid as covered under peril bush fire.
 
  • EXCLUSION
this exclusion has been incorporated in the policy because the machine which caught fire on its own damaged not because of fire but because some kind of breakdown or failure which resulted into fire. the policy specifically excludes loss., destruction or damage to any electrical machine apparatus, fixtures or ftting arising from or occasioned by over running , excessive pressure, short circuiting  arching self heating or leakage eof electricity from whatever cause provided that this exclusion shall apply only to the particular electrical machine.
 
LACK OF INSURABLE INTEREST
at times it is found that the subject matter of the claim does not belong to the insured or the insured does not stand to loose on account of loss to the subject matter of the claim.
 
  • An insured authorized show room of a reputed MNC reported loss to back lit glow sign board and forward an estimate of rs 80000 . the loss had occurred on account of storm an insured peril under the policy.
  • An insured  an authorized showroom of a reputed Indian garment brand had taken an insurance  covering the stocks belonging to the insured. there was loss of stocks furniture fixture and fittings.
  • An insured reported that here has been a collapse of the shed on account of storm. however there was a private vehicle parked under the shed which was also damaged due to falling of the shed. since the insured has ni insurable interest in the same the claim of the same is to payable.
  • the insured was a branch office of a nationalized bank who had taken a furnished building on lease. the same loss would be payable if the lease agreement had fixed the responsibility of the insured bank for the damages on account of insured perils.
 
SUBJET MATTER OF THE CLAIM IS NOT COVERED UNDER THE POLICY
the insured a reputed company manufacturing blankets reported loss on account of fire. during the survey it was found that the loss had occurred to a collection do screens. the insured uses screens for printing designs on the blankets fore every design the insured has to make three to eight screens depending on the colures used. the insured claimed that cost of each screen was 7500 and that there were a total of 1750 designs with average of five screens per design. the insured had taken cover for stocks building plant and machinery. the policy covers only the stocks plant and machinery and the careens were neither stocks nor plant and machinery accordingly it was ruled that the subject matter of the claim was not covered under the policy and the insurers can not be held liable to pay for the same.
 
THE LOSS HAS OCCURRED AT A LOCATION WHICH IS NOT HELD COVERED UNDER THE POLICY
the insured reported a loss on account of fire it was found that the address where the fire had occurred was different than the address mentioned in the policy. the insured was asked regarding the same and could not give any satisfactory answer. it was found that the premises as mentioned in the policy. the insurer turned down the claim on the ground that the location was not held covered under the policy. another insured reported a claim on account of fire to his stop. the insured had four shops all the shops carried same board and where located on the same street and qualified to be given as per the location mentioned in the policy. the insurers tired their best to turn down the claim however in the absence of proper identification of the insured location the insurer had to pay the claim.
 the insurer was not liable to pay for the loss as the location of loss was not held covered under the policy.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engg Dijo Mathew
Engg Dijo Mathew
Name24-Sep-2013
Name6725
Name
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