Fire Casualty Insurance: Helping You Recover Your Loss

Purchasing fire casualty insurance provides a form of protection for you in the event that you experience a loss due to fire to your home. Fire casualty coverage is usually part of a larger homeowner’s insurance package that also protects you from other types of loss. This includes damage caused by wind or hail, burglary and theft protection.

What Is Fire Casualty Insurance?

Fire casualty insurance is protection against the risk of loss due to fire or other damage to your home. The damage relates to property damage in and around the home, as a result of the disaster. Fire casualty protection pays a benefit to you as the insured to reimburse you for the value of those items that were destroyed or damaged.

What Is Indemnity?
The act of reimbursement, or restoring the value of loss property by an insurance company, is known as indemnity. Indemnifying a loss means that you will receive a benefit that does not exceed the fair or actual value of the item. This is an important concept because it protects the interests of the insurance company and the public against false claims. With the principle of indemnity, it is not possible to profit from a loss since the amount paid only restores the original value. The benefit is paid based on a submitted claim and an investigation of the facts to determine that an actual loss has occurred.

How Is a Loss Determined?

For a loss to be paid, the damaged item in question must be insurable. Insurance is based on three basic principles:

  • The nature of the loss must be accidental.
  • The loss produces a reduction in value.
  • The loss is predictable among a large population.

The last principle regarding large populations means that the occurrence of the loss must be measured among a large group of similar people. In the case of fire and casualty, the similar population would be homeowners in the area of the loss. If the occurrence of a loss is unique and not measurable, it would be hard to predict and hard to value. This protects you because the more predictable a loss is, the less expensive it is to insure.

Making a Claim
In the event that your home, or belongings, are damaged or destroyed by fire, you will need to notify the insurance company. The claim form is provided to you by the insurance company upon notification, usually within a prescribed period of time.

The practice of settling claims is governed by state insurance laws as a way to ensure that you are treated fairly and that the claim is processed in a timely manner. Without these types of consumer protections in place, you would be subject to changing standards and a higher rate of claim denial. You should take the time to review your fire insurance coverage to make sure that the claims process is reasonable and in keeping with state law.

blog comments powered by Disqus