If a loss arises out of theft and burglary, the standard fire and special insurance policy usually exclude it, unless stated otherwise.

Usually, most of the fire insurance companies think that burglary, theft or housebreaking are not linked with the fire accident, and therefore, the insurer prefers to deny any claim which arises out of theft and burglary after the accident.

Further, the theft and burglary coverage can go various variants under a fire insurance policy. It will depend on the fact when the loss happens. It means, if theft results into the fire, then the insurance company will cover losses due to fire, however, theft coverage will not be covered in any case. Similarly, if theft happens after the fire accident, that also won’t be covered under a fire insurance policy.

There are some insurance companies which allow you to cover theft in your fire insurance as well if you have a burglary insurance or specifically get the same mentioned in the fire insurance policy.

Case: 1

From the last five years, J.L Engineering has made a reputable name for itself in the engineering sector. Headquartered in Pune, the engineering company has its office spread throughout the country. Last year, the company purchased a fire insurance policy for its Delhi office.

A few months ago, the fire erupted at its Delhi office due to machinery failure and engulfed goods worth Rs 80,000. Luckily, the fire was doused immediately, and there were no serious physical injuries. After the accident, J.L Engineering had to shift its workers and equipments to another location. On the day of shifting, J.L Engineering found out that some of the company’s laptops were missing. Neither they were damaged, nor they were at the office premise.

After the thorough search, J.L Engineering found that these laptops were stolen by people who came to the office site after the fire.

As J.L Engineering had a fire insurance policy, it approached its fire insurance company for the claim settlement. In this case, the insurance company appointed a surveyor who visited the site to ascertain the losses and damages. The surveyor submitted the report, and the insurer reviewed the same in order to settle the claim. Along with the fire loss, J.L Engineering also asked the fire insurance company to settle the loss which it had to incur towards its laptops.

Read More: What is the Scope of Fire Insurance Policy?

As people took away laptops from the premise after the fire accident, J.L Engineering requested the insurance company to consider it as a theft and settled the same along with the fire insurance claim.

However, the fire insurance company refused to consider it as it was not covered under a fire insurance policy.

In this case, though, J.L Engineering lost its laptops when someone took them away after a fire accident, the fire insurance company refused to settle it along with a fire insurance claim.

Case: 2

After its successful stint in Hyderabad, M/S Home Furnishing opened an office in Chandigarh. To get financial protection in case of any mishap, the company also purchased a fire insurance policy along with a theft cover.

Last year, burglars drilled a two-foot hole in the walls of the office of the company and entered the office. As soon as they entered, the safety alarm got activated. In a bid to avoid being caught, they ran away but not before taking away desktop computers, home furnishing items.

Read More: What are the physical hazards in fire insurance?

On the other hand, a fire started due to short-circuit from safety alarm. The fire engulfed goods and stationaries kept there, and they got completely burnt.

Here, M/S Home Furnishing had a fire insurance and therefore, it approached the insurer for the claim settlement. Here the insurer analysed the proximate cause of the loss which was fire, and the insurance company agreed to settle the claim.

As M/S Home Furnishing also had a theft cover, it approached the insurer for the claim settlement. Here, the insurer sent a surveyor who inspected the extent of loss and found the claim to be valid as per theft cover. The insurance company settled theft related claim as well.

Note, the insurer paid theft claims as well because M/S Home Furnishing had bought a separate insurance policy for it along with fire insurance.