FIRE
INSURANCE
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.
- LIGHTNING DAMAGE
- EXPLOSION:
Explosion from
boilers or gas used for domestic purposes only.
VALUE
OF FIRE INSURANCE PAYOUTS
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.
EXTENSIONS
TO THE FIRE POLICY
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.
HOUSEOWNERS
AND HOUSEHOLDERS (H AND H) POLICY
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:
- domestic buildings against fire, explosion,
lightning, thunderbolt, or earthquake
- burglary, housebreaking, and any attempt at
theft if the building is occupied.
- WATER DAMAGE:
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.
- RIOT AND CIVIL COMMOTION:
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.
- THEFT:
- Theft in a normally occupied residential
building of cash, treasury notes, bank notes, savings certificates,
stamps, money orders, postal notes, and bonds up to a specified amount.
- STORM AND TEMPEST
- ARCHITECTS, VALUERS AND SURVEYOR'S FEES
- RENT AND OTHER COSTS:
The rental value of
the property to meet ongoing costs. Contents cover pays the
additional rent for the owner's temporary accommodation.
- DAMAGE TO HOUSEHOLD ELECTRICAL
MACHINES:
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.
EXCLUSIONS
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.
See:
insurance
replacement
cost