fire insurance.doument

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Fire insurance: it is the insurance that offers coverage against damage or loss due to fire. it is the insurance

obtained by owner of homes and commercial properties to provide reimbursement in case of losses resulting

from fire. Such insurance is supplied in exchange for the payment of a premium.

E.R. Hardy:-" Fire insurance in which the sun insured become payable on the

happening of a fire."

The basic fire-insurance policy covers losses resulting directly from damage or destruction by fire or lighting.

The first scientific system of obtaining funds to compensate for fire loss was developed after the great fire of

London in 1666, which devastated some 13,000 buildings. In the system inaugurated the following year by the

London merchant Nicholas baron, small sums of money were collected from many individuals, and a fund was

established for compensation of the losses sustained by the few whose property subsequently was destroyed by

fire. Fire insurance first developed during the late 1600s and grew along with the rise of crowded industrial

cities, where small fires could quickly spread and cause extensive damage and destruction. In the great chicory

fire of 1871, depicted here, flames destroyed 10 sq km ( 4 sq mi) of central chicory.

The first effective fire-insurance company established in the United states was the Philadelphia contribution

fore the insurance of houses from loss by fire. which is still in operation. It was organized in 1752 by Benjamin

Franklin. the use of fire insurance become widespread during the 19th and 20th centuries.

The standard fire insurance policy in the U.S. was adopted in New York State in 1943. It become the prototype

of such policies in most other states either through statute or through regulation by state insurance departments.

The resulting standardization has helped to reduce litigation on disputed claims by making the insurance

coverage more understandable to the policyholder and by simplifying adjustment of losses.

Life insurance

Life insurance (or commonly life assurance, especially in theCommonwealth) is a contract between an

insured(insurance policy holder)and aninsurer or assurer, where the insurer promises to pay a

designatedbeneficiarya sum of money (the "benefits") upon the death of the insured person. Depending on the

contract, other events such asterminal illnessorcritical illnessmay also trigger payment. The policy holder

typically pays a premium, either regularly or as a lump sum. Other expenses (such as funeral expenses) are also

sometimes included in the benefits.

Life policies are legal contracts and the terms of the contract describe the limitations of the insured events.

Specific exclusions are often written into the contract to limit the liability of the insurer; common examples are

claims relating to suicide, fraud, war, riot and civil commotion.

Life-based contracts tend to fall into two major categories:

Protectionpolicies

designed to provide a benefit in the event of specified event, typically a lump sum

payment. A common form of this design is term insurance.
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Investmentpolicies where the main objective is to facilitate the growth of capital by regular or single

premiums. Common forms (in the US) arewhole life,universal lifeandvariable lifepolicies.

Marine insurance:

: insurance against loss by damage or destruction of cargo, freight, merchandise, or the means or instruments

of transportation and communication whether on land, sea, or air

compareINLAND MARINE INSURANCE,OCEANMARINE INSURANCE

Marine insurance covers the loss to the ship or cargo during water transportation. The loss can either be a

complete loss or partial loss or damage. It also includes any loss incurred on the point of origin or destination,

during loading or unloading or material.

Ancient world.

The first methods of transferring or distributing risk were practiced by Chinese and Babylonian traders

as long ago as the3rdand2ndmillenniaBC, respectively.[1]

Chinese merchants travelling

treacherous river rapids would redistribute their wares across many vessels to limit the loss due toany single vessel's capsizing. The Babylonians developed a system which was recorded in the

famousCode of Hammurabi, c. 1750 BC, and practiced by early Mediterranean sailing merchants. If a

merchant received a loan to fund his shipment, he would pay the lender an additional sum in

exchange for the lender's guarantee to cancel the loan should the shipment be stolen.

TheGreeksandRomansintroduced the origins of health and life insurance c. 600 BC when they

created guilds called "benevolent societies" which cared for thefamiliesof deceased members, as

well as payingfuneralexpenses of members.Guildsin theMiddle Agesserved a similar purpose.

TheTalmuddeals with several aspects of insuringgoods. Before insurance was established in the

late 17th century, "friendly societies" existed in England, in which people donated amounts of money

to a general sum that could be used for emergencies.

American history

Colonial[

Benjamin Franklinhelped to popularize and make standard the practice of insurance,

particularlyProperty insuranceto spread the risk of loss from fire, in the form ofperpetual insurance.

In 1752, he founded thePhiladelphia Contributionship for the Insurance of Houses from Loss by Fire.

Franklin's company was the first to make contributions toward fire prevention. Not only did his

company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire

was too great, such as all wooden houses.

The sale of life insurance in the U.S. began in the late 1760s. ThePresbyterianSynods in

Philadelphia and New York founded the Corporation for Relief of Poor and Distressed Widows and

Children of Presbyterian Ministers in 1759;Episcopalianpriests created a comparable relief fund in

1769. Between 1787 and 1837 more than two dozen life insurance companies were started, but fewer

than half a dozen survived.

19th century

Most insurance companies operated locally.[16]

The ambitious ones expanded geographically in the

1830s, such as the New York Life Insurance and Trust Company in upstate New York, and the

Baltimore Life Insurance Company in the Mid-Atlantic and Upper South. They built a network of

agents to develop markets in different cities. The goal was to only insure people "of sound health, and

of sober habits, without hereditary disease, and not belonging to families remarked for short lives."
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Distinction point between, Life assurance, Fire Insurance & Marine Insurance respectively !!!

1. Nature of

contract

It is an ordinary contract whether it is simple or pure but the principle of indemnity does not apply in its contract.

It is a contract of indemnity.

It is a contract of indemnity.

2. Nature of

event

The event (death) that is considered in life assurance is a certain event which is bound to take place sooner or

later.

The event (fire) that belongs to this contract is uncertain which may or may not take place.

The event (sea perils) that belongs to this policy is uncertain which may or may not take place or which may

happen partially.

3. Claim limit

The whole of the assured sum becomes payable on the maturity of the policy.

Under fire insurance contract only the actual market value of the property or gods destroyed by fire can be

claimed from the insurance company. In other words there is not any profit motive.

Under marine insurance contract, not only is the cost of goods destroyed the sea perils but also 10% to 15%

margin of anticipated profit plus shipping charges payable by the insurer.

4. Duration

Life policy covers a larger duration and cannot be canceled by the insurance company.

The duration range of such type of insurance is from 10 days to 12 months. However it can be renewed after the

expiry of period.

Some types are issued for particular voyage but other policies cover a period of twelve months maximum.

5. Determination

of premium

The determination of premium rate is simple. Same rate of premium may be charged for all the persons falling in

the same age group.

In fire insurance risk are extremely varying, therefore the premium rates also vary violently.

In marine insurance risks are extremely varying, therefore, the premium rates also vary violently.

6. Surrender


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value

It has surrender value after three years of its existence.

It does not have is surrender value.

It does not have its surrender value.

7. Importance

It possesses not only the element of protection but also the element of investment.

It involves the element of protection only.

It involves the element of protection only.

fire insurance.doument

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