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Fire Insurance Claim Procedure


The claim procedure is explained in the terms and conditions as one of the conditions of the policy but no insured is reading the policy as and when he receives the copy of the policy . at the time of cliam the insured is more worried about the loss and do not intend to read the same . moreover at that time. but the insurer expects that the insured should follow the following steps to get the insurance claim whether it is payable or not.
 
 
1.Notice of Loss
When the loss. occurs due to fare, the known should give notice to the insurer. There fore. insurer cannot be liable to meet a claim unless he receives a notice of claim from tie insured Hence the insurer immediately after the occurrence of a fire should give a notice of loss to the insurer to register the claim of loss by fare.
 
2.Evidence of Loss
The notice of loss should be accompanied by the evidence of loss, the time, place and circumstances under which the loss (inured. He should mention the role played by him to mitigate the loss. To claim the loss, the insured must have taken necessary stem to mitigate the loss.
 
3.Formal Claim Form
 On receipt of notice, the and. sends a claim form to be insurer The insured should submit this form along with the details and evidence to be insurer to enable the insurer to determine the claim. This form contains all details of the damaged property and the market value of the damaged property sometimes the insured is required to send affidavit along with the claim form.
 
4. Inspection of Loss.
 After receiving the claim form, the loss is inspected by the experts known as 'Surveyors' or 'Valuers'. The surveyors estimate tie value of loss and send their report to the insurer, regarding. the nature and causes of fire They also carry out salvage   .
Orations and after taking account the value of salvage is reduced from the about if claim of the insured agrees to retain the salvage with him.
 
5. Ascertainment in Loss
After inspection of the site of loss and other information collected, the surveyors ascertain the total extant of loss to determine the liability of the insurer. While ascertaining the loss the surveyors take into account the time of fare, number of policies taken for the said subject-matter and cause of fire. then the surveyors calculate the loss according to the conditions of the fire policy.
 
6. Average Clause
In ascertaining the value of loss, the surveys ' have to see that whether the policy is subject to an average clause. If there is an average clause, the undamaged property is also to be valued.
In case of average policy the insurer is liable to pay the only such proportion of the loss as the so insured bears to the total value of the property. ' 
 
 
7. Estimation of Claim
 If the fire occurs more the one time   ' the currency of one fire policy the insurer is not liable to pay more the the maximum amount insured unless the insured has paid .   extra premium. If the subject-matter of insurance has insured with more .
than one insurers, the the claim is to be settled through the use of contribution clause and the liability of each insurer is limited to a ratable proportion. Sometimes, there is a damage and destruction of account all and records due to fire and therefore, the claim cannot be determined In such cases, the value of stock and the value of loss is estimated by preparing Trading and Profit and Loss Account. the past ratio of boss profit is applied to current year also and the boss pas profit is estimated. On the basis of this the surveyors will assess the amount of loss.
 
8. payment of Claim
After ascertaining the amount of actual loss the surveyors take a declaration from the insured regarding the acceptance of claim and the send the she along watts their report to to: insurer. the insurer then verifies the claim as per the conditions of the policy nod settles the claim in accordance with the term of fee click. the claim may be settled by cash payment or replacement of insured property or reinstatement.
 
9.Rejection of Claim
In some cases the insurance company may reject the claim. Generally, in the following cases the claim may be rejected : (1) If there is no insurable interest at the time of loss or at the time of taking click, (2) When the principle of utmost go faith is not observed, (3) When he loss has arisen from the ills excluded   from the policy, (4) If the loss had occurs due to the defect in the insured property which has not disclosed at the time of taking a fire policy, (5) If the insured has not taken all the possible steps to mitigate the loss etc.
 
de I ?raM?L 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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
sonali
sonali
Name24-Sep-2013
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