A fire insurance policy provides coverage against any property loss or damage in the event of a fire. Policy documents specify perils like fire, lightning, aircraft damage, storm, typhoon, and hurricane, offering insured protection. This article will explore the addition of an earthquake extension clause to a fire insurance policy.
Unfortunately, earthquake damage is not covered under a standard fire insurance policy, even though a major earthquake can cause significant harm to the insured’s property or goods. To address this gap in coverage, many proactive businesses and organisations choose to include an earthquake extension clause in their fire insurance policy.
The earthquake extension clause is an additional provision that can be added to a fire insurance policy, which specifically covers damages caused by earthquakes. A standard policy lacks this protection. Availing the earthquake extension cover, for an added premium, offers invaluable peace of mind to the insured.
The protection provided under the earthquake extension clause of the fire insurance policy
Under the earthquake extension clause, the insured is protected in the following two scenarios:
Scenario 1:
Earthquake fire coverage protects the insured against direct loss or damage caused by fire resulting from an earthquake.
Scenario 2:
coverage for earthquake shock – it covers loss or damage resulting from the shock caused by an earthquake.
Impact of the earthquake extension clause on the fire insurance policy premium
To benefit from this coverage, the insured must pay an extra premium to their insurers or insurance company. After paying the agreed-upon amount, the insured will receive coverage. This includes protection against property loss or damage caused by earthquakes or their after-effects.
The insured must understand the policy document’s conditions. This includes those pertaining to the earthquake extension clause, which may specify the following conditions:
Excess clause
An excess clause deducts a compulsory amount from the claim, encouraging prudent action. If the claim is less than this amount, the insurer pays nothing. The earthquake exclusion clause excess is generally 5% or a minimum of Rs. 10,000, which may vary among insurers, and policyholders should be aware of their policy’s terms.
For instance, if you claim INR 1,00,000, and the fire insurance policy’s excess clause states INR 10,000. In this scenario, the insurer will pay a claim of INR 90,000, with you responsible for the remaining INR 10,000 mentioned in the excess clause.
Onus of proof
The insured must provide proof of property loss or damage caused by an earthquake or its resulting actions as per the conditions outlined in the policy document.
Extension cover
The extension is granted if the property is a single compound/complex/location, and the sum insured for this extension must match the sum insured for the main policy, except for the value of the plinth and foundations.
In fact, availing of the necessary add-ons like an earthquake extension cover can enhance your fire insurance policy and can help you avail of complete protection. Property Fire insurance is crucial for protecting your business from devastating financial losses due to fires. It compensates for damages, repairs, lost equipment, and income. Without it, your business may not survive. In case of a fire and related accidents, inform your insurer immediately and cooperate with surveyors for assessment. Having the right coverage, knowing your fire insurance policy, and following the necessary claim processes can help you reap the benefits of the policy at the right time.
In conclusion, if you are seeking protection against earthquake damage you can add an earthquake extension clause to the fire insurance policy. Online fire insurance purchasing options can make it easy to research and compare policies from multiple insurers to ensure the best coverage and deal. By using the resources online, you can make an informed decision about your insurance needs.
About The Author
Shivani
MBA Insurance and Risk
She has a passion for property insurance and a wealth of experience in the field, Shivani has been a valuable contributor to SecureNow for the past six years. As a seasoned writer, they specialize in crafting insightful articles and engaging blogs that educate and inform readers about the intricacies of property insurance. She brings a unique blend of expertise and practical knowledge to their writing, drawing from her extensive background in the insurance industry. Having worked in various capacities within the sector, she deeply understands the challenges and opportunities facing property owners and insurers alike.
