What does a fire insurance policy cover?
Things to be kept in mind while comparing the different policies:
- A typical fire insurance policy covers the policyholder against the damage occurring due to electrical short circuit, kitchen fires, explosion of gas, bursting of water tanks or pipes, and natural disasters.
- While comparing policies, ask the insurance company if they pay compensation for valuables as per the market value for each item. As a responsible policy holder, you must evaluate the valuables at home on yearly basis to determine if there is a need to increase the coverage under the fire policy.
- The insurer reimburses the compensation on replacement basis if property is lost, or on an actual cash basis if it is damaged. Thus, it is better to opt for an insurer who will reimburse you for the current market value of the property, in case of total loss to the property.
- Most of the fire insurance policies have exclusions such as fire caused due to war, terrorism or riots.
- A fire insurance policy is usually valid for a year and you must renew it before it lapses to avail maximum benefit of the coverage.
Choosing an effective fire insurance policy requires you to compare the coverage and premium offered by different insurers. Document your valuables as it is easier for the insurer to determine the value of the items damaged. A policy should provide coverage from internal and as well as external source. In order to compare different fire insurance policies, it is advisable to compare online from a reliable insurance aggregator.