• Fire insurance

      Fire insurance is referred to compensating for the damages occurred due to fire risk to the movable and immovable properties of the insured (natural and legal). Therefore, in this insurance, the financial damages are covered and not the physical ones, which are not usually covered by this insurance.

      It should be noted that damages imposed to Third  parties properties during fire, for which the insured is legally held responsible shall also be compensated by the insurers together with the fire risk or separately through civil responsibility insurance. Like other property insurance types, fire insurance includes the principle of compensation, rule of assign, principle of good faith, insurance benefit rule and relative capital rule and premium which is of the following types:


      1.     Residential fire policy

      In this field, the insurance subject-matter includes building, installations and furniture covered against the risks of fire, explosion, lightning as main risks and tornado, flood, Earthquake and Volcanic, water pipe blow, rain and snow wastes, plane and helicopter /crash, and their separated parts, stolen furniture and other Perils.


      2.     Non- industrial fire policy

      The non-industrial Risks include all shops, repairs shops, hospitals, public areas, offices, transaction enterprises, medicine distribution centers, supermarkets, schools, service centers and other similar Risks.

      Building, installations, fixtures and decoration of any of the foregoing Risks may be insured against the risks of fire, explosion, lightning and all the additional risks of fire policy as per the market price.


      3.     Industrial fire policy

      Industrial Risks include all the food factories, beverages, tobacco products, textile, clothing, leather, wood, paper, cardboard, print and bookbinding, chemicals, non metal ores products, major metals and side industries which may be insured against the risks of fire, explosion, lightning and all the additional perils of fire policy as per the market price.


      Different types of covered risks in fire policies

      The risks in this field are classified into the following two groups:


      1.     Main risks (fire, explosion, lightning)


      Special Condition of main risks includes:


      1.     Risks are not separated from each other and all the 3 risks are covered simultaneously. In other words, fire policy include risks of fire, explosion and lightning

      2.     Main risks can be covered independently from consequential risks

      3.     Consequential risks (including Earthquake, flood, tornado, plane crash and separated parts, blown water pipe, snow wastes, broken glass, burglary, and pressure vessels explosion and Removal debris)


      Special Condition of consequential risks:


      1.     Each of the perils has separate rates which are added to the main risks rate in case of being covered.

      2.     Consequential risks cannot be independently covered from the main risks; i.e. the insured assets shall primarily be covered for the main risks so that we may insure the consequential risks. Consequential risks include franchise.


      Definition of consequential risks


      1.     Earthquake and volcanic risk


      In Earthquake insurance, the direct damages imposed to the areas whether residential, non- residential and industrial as well as furniture and fixtures in the same are insured against Earthquake and/or volcanic. Additionally, imposed damages should have been caused due to such events.


      2.     Risk of flood and sea and river overflow


      Flood is the sudden flow of shallow water deviated from the regular path due to rain, snow, overflow, or broken dams.





      3.     Tornado, storm and cyclone risk


      In storm insurance the damages caused by storm, tornado and cyclone are covered (usually in meteorology the wind faster than 62 Km/hr is considered as storm)


      4.     Blown water pipe and snow and rain wastes risk


      In this insurance the damages imposed to the insured object (building, etc) and properties and fixture inside the same are covered for the said risks.




      5.     Air Plane and helicopter Air crash risk


      The relevant risks or parts fallen from the same (except for bombs and explosives and other weapons) are insured up to the total amount thereof.


      6.     Removal of debris


      In this regard, the maximum Amount shall be 20% of  sum insured which shall be stated in the policy as for the removal of debris. The premium rate of this coverage shall be at least 50% of the covered risks rate.


      7.     Foreign object collision risk


      This type of coverage is asked for by the insured in case the insured location of the is besides road or downhill etc through which the risk of collision of vehicles whether engine or non-engine to the insured location may be compensated.


      8.     Self- burning risk (Spontaneous)


      When a carbon containing substance may be combined with oxygen and its combination with oxygen is together with heat self burning occurs.


      9.     Broken glass risk


      Damages resulted from broken glasses installed in the insured building due to event and the collision of foreign object is covered.

      Generally speaking, glasses are made in two forms of hollow and flat. The hollow glasses such as bottle, lamp and different glass containers are not insured, while the flat glasses are covered provided to be installed.


      10.                        Theft risk insurance


      The insurer compensates for the damages resulted from loss or damaged to the insured properties due to burglary up to the maximum Sum Insured.


      Different types of fire insurance policy:


      1-    Fire warehouse declaration policy


      Increasing/ decreasing the insured inventories due to enter/exit and/or inflation in short-term caused that the goods owners and producers use such insurance coverage and usually it is issued for the store inventory and considering the fluctuation of the inventories as well as payment of the insurance premium appropriated to the inventories, and based on this insurance policy, the insured shall state the insured subject as per his books to the insurer in writing by the end of each month and by the 10th of the next month and in case of potential damages the maximum liability of the insurer in this clause shall be the same insured price in the insurance policy and/or increasing amendments.


      2-    Fire policy based on first loss value


      (the first fire or damages) this policy is used in case the insured is sure that notwithstanding the damages intensity, the total loss of insured object is not possible or that the insured items are quite dispersed geographically and merely a small part of the same is damaged due to accident and it may also be classified into several independent risks and calculate the insured risks and other first loss capital factors in terms of capital; otherwise, (e.g. public stores), first loss policy is used. Principally speaking, in some of the disciplines all the properties are not subject to risk, e.g. theft. In such cases instead of insuring to the total value thereof, it is insured up to a certain amount indicating the maximum damages imposed due to the insured risk occurrence.


      3-    Fire policy with replacement value.  


      In case the insured receives such policy, then in case of accident and damaged/ destroyed insured object, instead of receiving the damages amount, the insured may ask insurer to reconstruct insured object and/or provide him with the equal of the same. Meanwhile, it should be noted that such term shall merely include buildings, installations and machinery (fixed properties) and covering the inventories and materials with said condition is avoided.



      4-    Fire policy with agreed terms


      In this type of policy, the insured assets are covered on mutual agreement in which the insurer obligates to compensate for the any of the insured items as per the mutually agreed upon items. Therefore, the insured may receive damages in addition to the price of the insured properties upon fire. Using this type of policy is common to insure fire for the paintings and artworks.


      5-    Loss of profit in fire policy


      It is one of the monetary loss policies, in which the insurer obligates to pay a certain cash amount in proportion to the losses imposed to the insured due to interruption in production resulted from financial damages such as fire. In case due to such damages any interruption occurs during production of a commercial or industrial enterprise, then the insurer shall compensate for the lost income due to such interrupted production based on loss of profit insurance contract. Production interruption damage includes the total amount of lost profit and current expenses. The loss of profit insurance resulted from activity interruption compensates for a certain term such as a month, 12 months, 18 months and even 24 months up to the time of restarting the insured unit.


      losses and expenses  which cannot be compensated under the fire policy

      Like other policies, fire policy has exceptions, while in case the origin of risk is of these exceptions then the insurer shall not be held responsible to compensate for the damages. Some of these risks mentioned as exceptions may be insured by the mutual agreement of the insured and insurer and payment of additional premium, which include:


      1.     Losses Caused by  civil war, riot, insurrection, revolution, coup-d’états , domestic unrests and/or cautious and disciplinary actions

      2.     Losses Caused by  Earthquake, landslide, flood, eruption, rive