The purpose of a fire insurance policy is to shield you from various losses or damages which can arise after a fire accident. In this case, if you would have a fire insurance policy, you can approach the fire insurer who would settle your claim and thus, curtail your financial expenses to a great extent. So, it’s important to know the utilities in Fire Insurance.
In case, the loss arises due to utilities like an accidental failure of power, gas, water, telecommunications, etc.; a standard fire insurance policy would offer a monetary shield against losses or damages if you buy an additional cover, i.e., utility cover for it. If you would expand your coverage with utilities in Fire Insurance coverage, you can enjoy more benefits at the time of fire loss.
Case: 1 The Utilities in Fire Insurance
Rajiv Gupta opened his new fashion house in Gujarat in 2015 during Navratri. He was confident to capitalize on the opportunities and increased its sale during festive times. When there would be a huge demand for clothes. To ensure complete protection against various losses or damages, he purchased fire insurance. It would help him in case any loss or damage happened due to fire.
As Rajiv did not want to take any risk with his business at such a crucial time, he expanded his fire insurance policy and bought an additional cover utility. He got a utility cover with an earthquake extension and also paid extra to get the cover.
Soon he got a contract for clothes exports worth Rs 10 lakh to Dubai along with some other local orders. The fashion house started working towards completing the projects. However, destiny had some other plans for Rajiv.
The earthquake occurred which damaged the nearby cities along with the fashion house as well. As Rajiv purchased a utility cover along with a fire insurance policy, approached the fire insurer for the claim settlement. The insurer appointed a surveyor who inspected the site and found that the losses were due to the earthquake and the total loss was Rs 2 lakh. The insurer asked for documents, like a duly filled claim form, a complete account of the accident, etc.; and agreed to settle the claim.
Here, it is important to note, as Rajiv had a fire insurance policy with extra utility cover, the insurer covered the losses and settled the claim. It would have been otherwise tough for Rajiv to deal with the unexpected financial losses that happened after the earthquake.
Case: 2
K.S is the leading temperature-controlled logistics services provider in India with its offices spanning different parts of the country. Though K.S always follows all safety regulations for the smooth functioning of its business; the company has also purchased fire insurance to get coverage in case any loss or damage happens due to fire. Further, understanding the risks which may arise during the business, K.S also paid extra to get an additional cover for utility. It means if losses or damages happen due to the failure of the public utilities like the supply of gas, water, electricity, and telecommunication at its workplace, that will also be covered under fire insurance.
Last year, its temperature-controlled warehouse in Pune had to incur heavy losses due to a power failure. As the warehouse had perishable items, due to electricity failure, they got damaged. As the company bought extra coverage in the form of utility cover, the company approached the insurer for claim settlement.
Read More: What is covered under a Fire Insurance Policy?
The insurer appointed a surveyor who visited the site to compute the extent of damages. The surveyor found a total loss of Rs 5 lakh due to power failure. Once the surveyor submitted its report, the insurer reviewed the same and asked for documents. Like a duly filled claimed form, a complete account of the accident, etc.; to settle the claim.
Here, it’s important to note, though the loss wasn’t due to fire, the insurer agreed to settle K.S’s claim. Considering the fact that the company had purchased an additional cover to get coverage for the accidental failure of public electricity, gas, and water supply, the fire insurance company settled the claim.
