The scope of fire insurance is quite extensive. The policy covers almost all types of damages that are caused due to fire and other allied perils. However, there are some major exclusions too in the policy. These exclusions specify when the coverage under the fire insurance policy would not apply.
Most fire insurance policies include a common list of major exclusions, although other insurance companies may offer them.
The list of major exclusions in fire insurance is as follows –
- War and related perils such as invasion, civil commotion, military revolution, civil war, rebellion, etc., cause any type of loss or damage.
- Nuclear contamination, radiation, or related perils cause any type of loss or damage.
- Contamination or pollution causes any type of loss or damage. If an insured peril causes contamination or pollution, the policy would cover such pollution or contamination. If the insured peril is caused by pollution, the damages suffered will not be covered.
- Aircraft damages that happen due to pressure waves
- Earthquakes, volcanic eruptions, etc., cause any type of loss or damage. However, fire insurance policies provide extensive coverage for these instances. The policyholder can get coverage for them by opting for the extension cover.
- A standard fire insurance policy does not cover items such as artwork, money, important documents, precious stones, etc. To avail coverage for these items, the policyholder should clearly detail their particulars when purchasing the policy.
- Any type of loss or damage in cold storage if there is a change in temperature
- Any type of loss or damage caused to the electrical equipment, apparatus, furniture, fixtures, etc. which happens due to short circuits, over-usage, extreme pressure, etc.
- Any type of loss of valuables belonging to the policyholder from theft, burglary, or housebreaking either before the peril happens or after there has been damage.
- The plan does not cover the costs of surveyors, engineers, architects, etc., but there is an extension available to cover these costs. The policyholder can purchase the extension for coverage.
- Selecting the debris removal extension under the policy allows the policyholder to obtain coverage for the costs of removing debris after the damage.
- The plan does not cover any type of consequential losses.
- The policy does not cover loss of earnings or losses due to production delays after the damage.
Besides these exclusions, fire insurance policies also have an excess clause. Under this clause, in every instance of claim, the limit of excess would have to be borne by the policyholder. The insurance company would then pay the remaining claim. For instance, if the excess limit is INR 10,000 and the claim is INR 25,000, the insurance company would pay INR 15,000 and the remaining INR 10,000 would have to be borne by the policyholder.
So, these are the common exclusions under fire insurance policies. The policyholder should know these exclusions so that he/she might know when to make a claim under the policy.