Fire Insurance is a type of insurance which provides cover for loss or damage caused…
FIRE AND THEFT INSURANCE
Fire insurance is an essential class of insurance to aid the growth of stability of manufacturing industry and other businesses in Nigeria. Since the effect of a single fire incident can create a multi-dimensional effect, there is need to make provision for fire risk by insurance companies.
Fire insurance is an agreement between the insured and the insurer, where the insurer promises to compensate the insured in the event of loss or damage to the insured property by fire or other specified perils.
The basic intention of fire insurance is to make good a loss suffered by the insured that arises from fire as it is insured under a particular fire insurance cover. This damage must occur within the period of cover and to the insured property.
STANDARD FIRE POLICY COVER
Fire policy will not cover fire damage regardless of what caused the fire. The standard fire insurance policy limits cover to causes under the following headings:
- Explosion due to use of boilers or gas for domestic purposes only.
This does not imply that this is the only way through which fire loss could arise; it is only saying that other causes are not covered by standard fire policy. The limitation under the above scope of cover can be eliminated by providing cover for extra perils known as special perils.
Special perils are those perils excluded from the standard fire insurance policy which insurers are ready to provide cover for, provided the insured is ready to pay additional premium. This policy is known as Fire/ Special perils insurance. These special perils are:
- Storm, tempest and flood.
- Impact by vehicle.
- Aircraft damage.
- Strike, riot and civil disturbance.
- Burst pipes causing overflowing of water tanks.
- Bush fire.
- Explosion due to industrial works.
- Tornado and cyclone.
This form of insurance provides compensation to the insured in case of loss or damaged to property insured against theft.
According to Theft Act 1968, a person is considered to be guilty of theft if he dishonestly appropriates property belonging to another person with the intention of permanently depriving the other of it. This definition is too broad for insurance company to carry the risk. For this reason the companies introduced the words “forcible and violent” into breaking into or out of the premises of the insured.
The forcible and violent breaking into the premises or out of the premises of the insured is the keyword to determine whether a loss is insured or it is an exempted peril ( excluding losses due to dishonesty of the employees or members of the insured household, or by trick or by a key whether original or duplicate).
However, insurance can provide cover for private residence in respect of theft that excludes force or violence, with payment of additional premium. Theft insurance policy covers the content of the building as well as damage done to the building while perpetrating theft.
Mr Olumide just imported some phones and hard currency from London. They were kept in the house. Mr. Olumide forgot to lock the door to his flat in the night. While the security man was on his way to lock the main gate of the compound, armed robbers came into the house and went away with Mr. Olumide’s phones and hard currency. He felt his theft insurance policy with Diamond Insurance Company will compensate him. But unfortunately for him, the company refused the claim, and was made to understand that the theft act did not arise as a result of forcible and violent entry into the house.
ALL RISK INSURANCE
An improvement upon the existing theft and fire policies could be found in ALL RISK INSURANCE. Since both theft and fire policies emphasize that the event must occur at the premises of the insured, but for all risk insurance, the policy extends to cover the loss or damage that occurs outside the premises of the insured. (That is, it guarantees loss or damage for property insured wherever the property is located at the time of the loss).