Importance of Fire insurance contracts in our society
14 min read
The question of what is means by fire insurance is what a lay man on the street will always ask to legal luminaries on the field and to the commercial actors. To really understand what is mean a fire insurance coverage or a fire insurance policy, there is a need for the person to first of all identify the reasons behind the formation of fire insurance company.
The rapid transformation of villages to towns and the gradual change of towns to cities taking into consideration an increase in population, houses in this cities and towns are becoming too congested. Because of this increase in houses and population, there is very high increase in the occurrence of fire incident in the midst of this congested houses. The increase of population on the other hand has played a major role in inviting the fire insurance companies in our society today since many now engage in using fire equipment especially for cooking and also electricity for housing consumption. The increase in houses and population is the major cause of fire occurrences or fire outbreak in many occasion and nearly in all circumstances. Thus the fire insurance is the best house insurance which every home owner need to pursue. The home coverage entails covering home and properties inside the house which may also be damage as a result of the fire incident. The people are always interested in house fire insurance because it is the most valuable property which need to be protected against any uncertain fire incident.
Fire insurance policy as a whole is essential because there exist industrial zones in the various countries which you may find yourself. Since there is rapid growth of industrialization in our society, for the proper management and to control the occurrence of possible fire outbreaks, which may lead to the destruction of many homes of innocent people. The government in different countries have come up with the idea of setting industrial zones which are far away from homes as a major way of limiting the effect of fire in our society.
Though the governments in various states are doing a lot to fight against any outbreak of fire and to control fire extension to other nearby houses or industries when it must have finally break out, by forming the firefighting command, national fire control associations etc. there is a need for the existence of the fire insurance company because these companies are out to look at both the retroactive or the retrospective effect of the occurrence of fire and the non-retroactive effects of fire incident and to compensate the victims of the fire outbreak.
Fire insurance is therefore the company which is out to protect and compensate the victims of the fire incident. For a victim to benefit from fire insurance company he or she must be a member through registration. The question now is how to get registered in a fire insurance company?
For someone who is interested in getting registered into the fire insurance company, he or she need to follow the normal procedures in a general contractual agreement by first of all taking into consideration key instruments like offer and acceptance, consent, premium, the legality of object and legally binding agreement.
The fire insurance company helps in compensating victims of fire incident.
It is when somebody most have been injured by the outbreak of fire that he or she can understand what it means and how expensive the loss is when there is a fire occurrence both in the housing or home context, the industrial and other commercial context. Fire insurance company being the best house insurance, is of help to the house owners and the tenants because house fire insurance depending on the agreement between the insurer and the insured, will protect the house itself and the properties inside the house. Hence the proper agreement entered into by the insured and the insurer will also lead to a proper compensation when the risk occurs
For a victim to enjoy this services from the fire insurance coverage or the house fire insurance in particular, he or she must be paying a periodical sum of money or the premium to the house fire insurance so that at the time when the fire occurs he or she will be compensated when he has followed the right procedures. It is important to note that in this type of insurance policy, the insurance company always insist on the insured to state the possible thing that can lead to the outbreak of the fire incident. And when at the occurrence of the fire incident, and the company upon investigation discovered that the fire outbreak was not from the specified incident, they will not compensate the victim since the cause will not have the relationship with the contractual liability insurance agreement. For example, if a person entered into an agreement with the house fire insurance company and the legally binding document is to the facts that the occurrence of fire must be but from the electric spark, and the fire outbreak occurs in that person’s house and the house insurance company upon investigation, discovered that the victim was in possession of cooking gas bottles which rather cause the fire incident resulting from the explosion of the gas bottle, hence the victim will not be compensated because the risk of fire incident did not occurs but from the agreed specified instrument and also because the victim failed to disclose that he is in possession of the cooking gas bottles.
Somebody may not be compensated when the fire upon occurring effect but the whole public. This is because the fire insurance company is by it terms or general rules and regulations not responsible for mass risk which may be as the result of the occurrence of natural disaster like wide fire cause by volcanic eruption or wide fire cause by electric power failure which as a result affect the whole public. for example, this scenario can be illustrated where like in the City of New York in the United states of America, if there is an electric spark which lead to the destruction of a quarter of the city, the fire insurance company will not be oblige to compensate the victims because if the fire insurance company do try to compensate the whole part of the city, they will become bankrupt. Because of this reason, the company have made it in such a way to avoid this type of situation by making it as part of the initial agreement that they will not compensate when there is a mass fire occurrence.
Fire insurance coverage protects the businesses in our society
Businesses are protected when the owners get registered in the fire insurance policy, and it can be seen at most in every city around the world. This is because in various cities, there is usually the use of heavy electrical machines in doing business like in the industries, the sale of cooking gas and other provision stores. For these business owners who wants to be secure, they will engage into the contractual agreement with the fire insurance company to transferred the large risk of the occurrence of fire incident to the insurer in order to wipe the fear of loss and continue with the business. Thus this shows that the activities of the fire coverage insurance contributed in the business world a lot because the services which this fire insurance company provide by accepting to take the large part of fire risk against just a token of premium paid to the company periodically.
Also still in the business environment, the fire insurance company helps in the country’s economic growth indirectly and directly. The company by helping other companies to grow by the way of encouragement and by taking their risk of fire incident which may come as a result of the uncontrollable forces, helps in the growth of the country’s economic growth. The fire insurance company also contributed directly into the country’s economic growth by injecting money into the economy by granting loans and by operating other enterprises using the profit gain from the premium paid by the individuals and the public when registering into the company.
The fire insurance also protects the businesses or the enterprises by compensating the injured parties who most have hurt by the fire incident hence leading to huge financial break through on the side of the victim. Because of this financial break through, the entrepreneurs are able to go back to the business strong and determine.
Also, the fire insurance coverage helps in restoring the country’s resources which are being destroyed by the fire outbreak. That is, when the fire insurance coverage compensates the victim and restore the damage instrument or resources, it helps in the economic maintenance and stability in the economy
The fire insurance company is important because it distribute the losses of fire incident among the various contributors
When an individual is affected by the fire incident, the insurance company will not go to banks and borrow money to come and compensate the insured, but the insurer will just withdraw the money contributed by many insured persons. The contributions from these individuals are with the prior aim of helping each other when the risk occurs. For example, if one hundred thousand (100, 000) insured persons registered into fire insurance company, out of this number may be only one hundred (100) persons can at times have fire incident which needs to be compensated. Compensating these few individuals will entail that the money of other individuals who happen not to have fire incident or who did not suffer any damage or hurt by the occurrence of fire incident will be use and the risk will automatically be share or distribute among the injured persons thus meaning that the risk has been shared or distributed among the insured persons
Before the compensation of the victim as far as the fire insurance which is the best house insurance is concern, the victim of the fire outbreak must be able to establish that the fire incident actually occurs. And this occurrence must cause a damage to the victim’s property or must hurt the victim himself
The fire also should not be intentional but must be unintentional so much so that people should not in some time played the fire insurance or the best house insurance by removing important and valuable items and then set the house in fire so that he or she should make gain. Thus for the fire insurance company to limit this situation, they will always investigate the circumstances which lead to the occurrence of fire fully and gently. After the investigation, they will only compensate but the victim whose fire incident is as a result of the unintentional forces
Its very important to understand that this fire insurance company is part or type of non-life insurance policy and the characteristic of the non-life insurance also applies in this type. For this reason, the occurrence of the fire incident need to be uncertain. This means that the fire incident should not be the one that usually happens periodically or the one which is certain that it must happen in this particular time
The procedures to follow before you can be registered in the fire insurance company
The fire insurance coverage like any other type of insurance company, have it terms which the insured needs to fulfil before he or she can be compensated when the risk comes. The contractual agreement rules and regulations which is the heart or the core foundation of the relationship between the insurer and the insured need to be respected and maintain. That is the primary conditions like offer and acceptance. Concerning offer and acceptance, the person seeking the fire insurance coverage needs to go to the fire insurance company so that he or she can make an offer for the company to see into it whether to accept it or not. Another condition which is the second to offer and acceptance is that the when the person looking for the company to protect them against risk, the company have to consented and decide whether to agree or not thus meaning that the consent can be positive or negative.
When the company must have consented, the insurer and the insured will now have to entered into a real business. Entering into real business means that the person seeking the registration will now open up with the insurer and explain to him all him or her what the problem is. It is good to understand that here the insured for example needs to explain and disclosed all possible instrument in the house which he or she think can quickly because of the unknown reason result to fire. Making known the instrument which can cause fire to the insurer create chances of being indemnify when the fire hurts him or her. Still in the process of disclosing, the insured need to disclose all the assets and the real prizes per important asset in the house so that the insurer can be able to tax the insured according the amount of loss he or she have to entered into when the fire hurts the house. The insured upon disclosing the assets need to proof to the insurer that the assets are his or her legal assets and the insurer need to make sure that the assets are legal. For example, there cannot be a contractual agreement with the property or goods which are illegal like cocaine or marijuana etc.
When the fire insurance company is convinced with the details given by the insured and that the assets insured against are legal, they will levy a tax on the insured known as a premium. This tax or premium will be according to the assets disclose by the insured. The premium is usually paid periodically to the company depending on the contractual agreement.
The company on the other hand will now be oblige to also tell the insured the amount which he or she will be compensated when the fire incident occurs. This is to assure the beneficiary that he or she will be compensated when the event occurs. The promise of the specified amount to be paid is not a verbal agreement but must be documented so that the insurer should have legal grounds to indemnify and the insured should also have legal grounds to claim when the fire incident occurs. The document will now be sign by the insured and the insurer to be binding and it will automatically become an obligation for the insurer to pay or indemnified the insured when the fire incident hurts the victim or when the fire cause damage to the victim’s property.
The effect of failure to follow the rights procedures. The failure to effects the procedures laid down by the general contractual rules and regulations will be in detriment of the insured since he or she will lack the legal grounds to be compensated when the risk of fire incident occurs. But taking into consideration the principles of the law of equity, if the insured was misled by the agent of the fire insurance company, he will be taken to be a bona fide purchaser. This means that he will be compensated because of the interest of justice and not because he or she possesses the legal capacity to be indemnified by the insured company.
Breach of the fire insurance contractual conditions and it effect
The breach of the contractual conditions may either be the breach patterning to the general or specific conditions. When it concerns but the breach of the general conditions, the laws governing the general contract will apply. The fire insurance contract may be void, voidable, the court may also order the rescission of a contract or even the specific performance depending on the circumstances surrounding the fire breach of general conditions. On the other, hand, concerning the breach of the specified conditions between the insured and the insurer, the rules and regulations put into agreement when entering into contract will be applied. For example, if upon entering the fire insurance contract, both the insurer and the insured agreed that if the insured failed to disclose all properties in the house, only the one that he or she actually disclosed will be compensated. Therefore, if there is any fire incident in the house, the insured cannot in return when the fire occurs claim the legal grounds that the.
Fire insurance, climatic change and the place of the insured property
fire insurance policy is the top or the best house insurance to entered into when somebody is in fear of fire incident in the near future. But the premium to be paid by the insured varies from season to season depending on the location of the house or business place. This means that if the contractual agreement between the parties to the policy is on the house for example which is near a bush or near a forest, the premium in the dry season will be higher than the one entered into in the rainy season. Therefore, the premium will vary or changes from season to season which automatically means that the change in climate will affect the fire insurance family positively and negatively.
Taking into consideration the climatic change, one must also take note of the location of the property. For example, if the property like the house is located near or in the city, there will be less effect patterning to climatic change than other areas since the climate will not affect the city as it is the case with areas where there are bushes and low house planning.
Insurable interest in the property insured against the fire incident
Any person trying to insured a property must have an insurable interest in that property. Having an insurable interest in the property means that the party insuring his or her property must have legal rights over the property. At the happening of the fire incident, the victim who is having that insurable interest must suffer financial damages or damages which can be measure before he or she can be compensated. Financial damages here mean that the damage must be worth to measure in sum of money. For example, if the fire affects the health of the victim, the compensation will be money use spend in the hospital and the money which is used for minor issues. From the above principle of the insurable interest, one cannot insure the property which is unmeasurable or which cannot be measured in terms of money since the insurance company deals with the financial compensation in money.
Houses are the highest property in the whole world in which the number of persons seeking the registration into the fire insurance company keep on rising on daily bases. This is because the fire insurance policy is the best house insurance and Many people are afraid of suffering huge financial losses when there is a fire incident. Because of this fear, there is a mad rush for the registration into the fire insurance company so that their large risk should be transferred to the insurer against a premium paid and in return of compensation or indemnity.
NB this same article have been sold and published in voticle website
Berinyuy Cajetan is the founder and publisher of Human Rights and Legal Research Centre (HRLRC) since 2017. He has intensive experience in strategic communications for Civil Society Organizations, campaign and advocacy, and social issues. He has an intensive experiencing in human rights monitoring, documentation and reporting.
