Kinds of Fire Insurance Policies for Startups

A fire breakout is a catastrophe that can cause irreparable damage to the property, pushing the owner into a financial crisis. However, fire insurance not only saves one from financial stress but also provides many other benefits.

The following are the benefits of a fire insurance policy, specifically for businesses.

Provides Financial Aid: The primary benefit of fire insurance is that it provides financial assistance to the policyholder. When the insured property gets damaged due to a fire breakout, the insurance company pays for the damage and repairs, saving the owner from financial stress.

Enables Business Continuity: When you buy fire insurance online, the insurance company ensures that you get quick funds for repair and reconstruction, allowing your business to be up and running in no time. Therefore, fire insurance ensures that business continuity is not hampered and that your business starts operating quickly.

Encourages Risk Mitigation: Many insurance companies require property owners to have the essential fire safety measures on the premises to be eligible for a fire insurance policy. By installing fire extinguishers, sprinklers, fire exits, etc., the owners can reduce the damage and also avail of discounts on insurance premiums.

Brings Peace of Mind: A fire insurance policy allows you to focus on business growth and development as the financial burden in case of an accident is shifted to the insurance company.

Different insurance providers follow different processes for the renewal of a fire insurance policy. However, the process is simple and can be completed in a few steps if you pay attention to the details and requirements.

Here is a step-by-step way to renew a fire insurance policy.

Assess the Current Policy: The first step is to assess your current fire insurance policy and note the premium, coverage, add-ons, etc. Reviewing the policy allows you to understand whether it meets your current and future requirements or needs changes.

Connect with the Insurer: It is advisable to contact the insurance provider well in advance before the policy expires. Most insurance companies want the policyholders to apply for renewal at least 30 days in advance so the policy coverage continues seamlessly after the expiry.

Reconsider the Benefits & Coverage: If you have made any changes to the property or assets after purchasing the previous policy, you may want to enhance the coverage or include additional risks. Therefore, you must look into existing benefits and make changes if needed. You can seek advice from the company representative if you need to include any add-ons or make changes to the policy.

Ask For A Renewal Quote: The next step is to ask for a renewal quote. If you decide to continue with the existing benefits and coverage, the premium may stay the same. However, if you want to include add-ons or enhance the coverage, the premium will increase. Hence, it is advisable to understand all the renewal terms and conditions and assess whether they are beneficial to you.

Compare The Options: You must compare the different fire insurance plans and pick the one that meets your requirements adequately and also fits your budget. Alternatively, you must also look at the coverage and benefits that other insurance companies offer to grab the best deal.

Premium Payment: If the quote is within your budget and you are satisfied with it, you can pay the premium online. Insurance providers offer several options to make the payment to make the process convenient.

Policy Issuance: Once you pay the premium, you will receive the policy in a few minutes. After you get the policy documents, you must review all the terms and conditions to ensure that details are correctly mentioned.

Preserve the Policy: After the policy is renewed, you must keep all the documents carefully, including the payment receipts, the policy documents, and any other related documents.

Fire insurance is a shield that protects your assets in the event of a fire breakout. It is crucial for your business as it provides financial aid in the case of damage. Therefore, it is crucial to timely renew the policy for various reasons, as outlined below:**

Continuous Coverage: Since fire insurance provides financial coverage when the property is damaged due to fire, its renewal is crucial. If you do not renew the policy on time, and a fire breaks out, you will miss out on the coverage and suffer a substantial financial burden.

Compliance with the Requirements: If your property has loans or mortgages, fire insurance may be a mandatory requirement by the lender. You may be required to have a fire insurance policy as per the loan agreement, in the absence of which you will be committing a breach of contract.

Helps to Save Additional Cost: It is wise to renew fire insurance on time as it is cheaper than buying a new policy. In many cases, you may have to pay an excess premium if the policy has lapsed.

Regulatory Compliance: It is necessary to comply with the regulations of the jurisdiction in which your premises are located. Therefore, you must renew the policy on time to comply with the regulations of the authorities.

Improves the Business Image: Renewing the fire policy creates a positive image of the business among employees and the public. You are seen as a responsible business owner, and it helps foster relationships with customers, suppliers, and employees.

Smooth Claim Processing: When your insurance renewals are made on time, there is less room for disputes and disagreements at the time of claim processes. The claims will be processed faster without any questioning.

Allows You to Focus: Business owners who renew their fire insurance on time are assured that their business, property, and employees are adequately shielded. Therefore, they can focus on the business and not worry about unforeseen events causing financial stress.

It is crucial to buy fire insurance online to shield your property from fire damage. You must understand the various types of policies available so you can buy the one that suits your needs and provides adequate coverage.

The following are the types of insurance policies:

Valued Policy: As the name suggests, a valued fire insurance policy is one in which the value of the insured property is decided in advance. In such a policy, the amount of compensation is equal to the agreed value, irrespective of the market value of the property at the time of damage.

Average Policy: An average policy is a standard policy in which the average clause is applied. The insured is penalised for under-insuring the property. For instance, if a person has a property worth ₹5,00,000, but he insures it only for ₹3,00,000. In such a case, the average clause is applied.

Floating Policy: This type of policy allows the policyholder to include multiple properties under a single fire insurance plan.

Comprehensive Policy: A comprehensive policy offers protection against various other perils apart from fire. Many insurance providers offer coverage for fire due to lightning, explosion, burglary, riots, etc., under a single policy.

Replacement Policy: Under the replacement policy, you get the replacement value of the insured asset after it is damaged. The cost of replacement is determined by the market value minus the asset's depreciation.

Specific Policy: A specific policy offers coverage of a specific value which is decided in advance. Irrespective of the value of the loss suffered, only the specified amount is paid out. However, there is no penalisation as in the case of average policy for underinsuring the asset.

Fire insurance is necessary for various entities, such as business owners, manufacturing units, shop owners, residential property owners, educational institutions, banks, and financial institutions.

Given the unpredictable nature of accidents, it is in the best interest of property owners to renew their fire and burglary insurance online insurance before it expires. Apart from financial assistance, it also gives mental peace to know that their property is secured.

Understanding the importance of fire insurance and renewing the policy on time is the key to ensuring the safety of properties.

Remember to assess and review the existing policy and, if necessary, make the desired changes to enhance the coverage according to your needs.

If you want to avoid the hassle of extending coverage, you can consider the fire and burglary insurance offered by Tata AIG. It is a comprehensive policy that protects your property from multiple perils under a single plan.

In this, burglary insurance is covered along with the coverage from fire and related perils under one umbrella.

What is included in a fire insurance policy?

The fire insurance policy includes damage due to fire, jungle fire, explosion, lightning, landslide, rockslide, impact damage, riots, strikes, missile testing operations, natural disasters, and so on.

What documents are required for a fire insurance claim?

The following documents are required to file a fire insurance claim:

• Fire insurance policy documents (original)

• FIR report

• Insurance form (filled and signed)

• Forensic report, if applicable

• Video recording of the damage or newspaper cutting

• Photo and video proof of the incident

What add-ons can be included in fire insurance?

You can customise your fire insurance by including add-ons such as escalation clause, accidental damage cover, floater cover, declaration policy for stocks, involuntary betterment, rent insurance, contract works, electrical injury, and so on.