Fire insurance is the basic insurance coverage and from this basic policy a number of extensions and variations are available to cover other risks. The courts have held that "fire" consists of actual ignition and It must be accidental from the insured's viewpoint. Therefore, scorching and smoke damage is not covered by a fire policy. The risks covered in a standard fire policy are:

The basic fire policy only covers fire resulting from explosion or otherwise but not caused by "spontaneous fermentation", heating, earthquake, subterranean fire, riot, civil commotion, war, invasion, act of foreign enemy, hostilities, civil war, rebellion, revolution, insurrection or coup. Explosion from boilers or gas used for domestic purposes only.


The amount paid to the insured is the value or replacement cost of the property damage or destruction at the time of the fire or the insured against risk. “Value” means market value. However, the insurance company has the option to reinstate or replace the damaged property or any part thereof. This option is commonly exercised over a loss that is difficult to value such as the replacement of a historical feature in a heritage building or where there is a long running dispute between the insured and the company over the value of the damage suffered.


The original fire policy was extended to cover losses from a number of accidental happenings beside fire. The standard fire policy now includes a number of extensions such as damage caused by aircraft, earthquake, explosion, fusion, impact, malicious damage, removal of debris, for loss of rent, riots, strikes, storm, tempest, and water.


This policy is sometimes called a comprehensive policy as it includes a number of extensions to the basic fire policy which are appropriate for the houseowner or householder. However, the use of the word “comprehensive” in this case is misleading and probably contrary to the Trade Practices Act because it is not at all "comprehensive". It is the most common policy and the valuer is often called upon to value damage to a cottage under It. The policy has the following extensions:
Water damage from bursting, leaking, discharging, or from overflowing water tanks. This is a common claim. The accidental breakage of fixed glass and "prime cost" (PC) items. Damage from riot or civil commotion Damage from the impact of aircraft etc and *articles, dropped therefrom, impact by a road vehicle or, animal, falling trees, TV and radio masts. The rental value of the property to meet ongoing costs. Contents cover pays the additional rent for the owner's temporary accommodation. Except for certain exclusions. For example, cover up to $10 million worldwide. In some states this may also include workers' compensation for domestic workers. This clause is subject to a number of limitations. For example. demolition, debris removal charges, fees for architects, surveyors and solicitors. The cost of demolition and cleanup after fire can be most expensive however these are items often ignored.


The typical houseowners and householders policy does not cover damage caused by heat, floods, nuclear reactors or weapons, normal wear and tear, and sparking from electrical contacts.

replacement cost