InvestorQ : Can you tell me more about Fire and Special Perils Policy under home insurance?
Rohan Bhadani made post

Can you tell me more about Fire and Special Perils Policy under home insurance?

Samita Patil answered.
3 years ago

One of the most sought-after home insurances, the Fire and Special Perils Policy is an insurance that protects the insured against unforeseen accidents caused by:

- Accidental fire

- Lightning

- Explosion/implosion

- Destruction or damage caused by aerial devices

- Man-made perils in the form of riots, strikes, etc

- Natural calamities like storm, cyclone, flood, etc

- Damage caused by impact by a rail or a road vehicle

- Damage caused by landslide or subsidence

- Peril caused by pollution and contamination, bursting and/or overflowing of water tanks, apparatus and pipes, missile testing operations, leakage from automatic sprinkler installations and bush fire.

A Fire and Special Perils Insurance Policy is a contract wherein the insurer (insurance company) guarantees to pay for the loss and damage caused to the property of the policyholder for the specified period of time. A fire policy is usually a one-year policy and is annually renewable.

The valuation of assets is made according to the market value. The value factors in both depreciation as well as the appreciation of assets due to inflation.

A named-peril policy covers the policyholder only for the risks named in the policy in contrast to an all-risk policy, which covers all causes of loss except those specifically excluded. Thus, it is important that the cause of destruction be stated in your policy document for claiming settlements.

This insurance can be bought by house owners (for their own house) and also by tenants who are residing in a rented house.