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WHAT DOES FIRE INSURANCE COVERS?

There is a level of risk attached to every human activity. And when it comes to physical assets, the possibility of loss should never be overlooked. Events in the recent pasts all round the world and especially in our part has awakened us to the destructive potential of fire. And while homes, organisations and governments are making tremendous effort at preventing its occurrence and effective management (should it occur), insurance provides an adequate avenue for a soft-landing. 

Today we start a new series of discussion under Fire Insurance (FI)

Just so you know, FI is a very broad class of insurance and it has a lot of both historical and theoretical references to its credit. However, we are not going to bore you with all these. Therefore, we shall be limiting our discussion to the basics – what you need to know to make an informed decision.

It is however necessary to state that the Nigeria FI market makes use of a fire policy popularly referred to as the “A.B.I. (Association of British Insurance) wordings”.  It is a kind of Uniform Policy conditions (UPC) adopted by the fire insurance market which was introduced to Nigeria in 1989. The Fire Offices Committee of Nigeria (FOC), an arm of the Nigeria Insurers Association (NIA), vetted and adopted it for use.

Under ABI wordings, all other perils that were hitherto excluded from the main fire policy (but incorporated into the policy based on special request by the insured) are now regarded as part of the policy. This has become the standard in the Nigeria market hence, the term Fire & Special Perils Insurance (FSP).

The term “Fire” in insurance is slightly different from what the general public understands it to be.

WHAT DOES FIRE IN INSURANCE MEAN?

(a) Implies the ignition of something, which ought not to be on fire.

(b) Must be fortuitous or accidental in origin as far as the insured is concerned.

As far as fire insurance is concerned, fire doesn’t imply:

(a) A fire lighted for a specific purpose while confined to it’s normal limits.

(b) Articles scotched while being aired in front of a fire or by a hot iron.

(c) A fire caused intentionally by the insured or at his instigation.

In insurance, fire damage Includes;

(a) Destruction or damage by fire when fire goes outside its normal limits.

(b) Incendiary fire: loss, destruction or damage caused by fire which was started      unlawfully by some persons without the knowledge or the agreement of the insured.

(c )Property damaged by water used in extinguishing the fire or by other extinguishing agents.

(d) Damage caused by fire brigade while fighting the fire.

(e) Damage caused by smoke.

(f) Damage caused by falling walls or part of a building in which a fire takes place.

Summary of covers under Fire & Special Peril Insurance

FIRE & SPECIAL PERIL INSURANCE

  1. Fire (including Lightning and Domestic Explosion)
  2. Explosion
  3. Aircraft
  4. Riot, Strikers, Lock-out Workers
  5. Malicious Damage
  6. Earthquake and Volcanic Eruption
  7. Storm and Tempest
  8. Storm Tempest and Flood
  9. Escape of Water from any tank apparatus or pipes
  10. Impact by any road vehicle or animal.
  11. Bush Fire

To be continued.

Thank you for reading. We would like to have your view and also know if this post has been of any benefit to you. Kindly leave a comment.

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