Page 189 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Insurance Laws and Practices

Notes 15. Consequential Loss Policy: It is a policy in which the underwriter agrees to indemnify the
insured for the loss of profits which he suffers due to the dislocation of his business, caused
by fire. It is also called ‘loss of profits policy.’

Self Assessment

Fill in the blanks:
9. An …………………………………. policy in one in which the value of the subject matter is
not declared at the time of policy taken.

10. A fire policy containing ‘……………………………………’ is called an average policy.

10.4 Payment of Claim under Fire Insurance

You need to know the process of payment of claim under fire insurance. Following procedure
should be followed in case of claim settlement under fire insurance:
1. If there is any damage or loss arising due to fire then the policy holder should immediately
inform the insurance company in writing and with estimated amount of loss.

2. Survey Report: If the amount of loss is small (i.e. up to ` 20,000/-), the insurance company
may depute an officer to survey the loss and decide on the settlement of the loss on the
basis of the claim form and the officer’s report. However, in large losses, an independent
surveyor duly licensed by the Government is appointed to give a report on the loss.
3. The survey report would generally deal with the following matters:
Cause of loss,

Extent of loss,
Under-Insurance, if any,
Details and value of salvage, and how it has been disposed of or proposed to be
disposed of,

Details of expenses (e.g. fire brigade expenses),
Compliance with policy conditions and warranties, and

Details of other insurance policies on the same property, and the apportionment of
the loss and expenses among co-insurers.
4. Claim Form: The policy holder will submit the claim form with the following
information:
Name and address of the Insured,

Date of loss, time and place from where the fire started,
Cause of fire,
Details of the property damaged such as description, etc.,
Value at the time of fire, value of salvage and the amount of loss,

Details of other policies on the same property giving the name of the insurer, policy
number and sum insured,

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