Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance or boiler insurance. Property is insured in two main ways - open perils and named perils. Open perils cover all the causes of loss not specifically excluded in the policy. Common exclusions on open peril policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism and war. Named perils require the actual cause of loss to be listed in the policy for insurance to be provided. The more common named perils include such damage-causing events as fire, lightning, explosion and theft.
Fire insurance coverage
There are three types of insurance coverage. Replacement cost pays the cost of replacing your property regardless of depreciation or appreciation. Extended replacement cost will pay over the coverage limit if the costs for construction have increased. This generally will not exceed 25% of the limit. Actual Cash Value provides replacement minus depreciation. When you obtain an insurance policy, the coverage limit established is the maximum amount the insurance company will pay out in case of loss of property. [ citation needed] This amount will need to fluctuate if homes in your neighborhood are rising; the amount needs to be in step with the actual value of your home. In case of a fire, household content replacement is tabulated as a percentage of the value of the home. In case of high value items, the insurance company may ask to specifically cover these items separate from the other household contents. One last coverage option is to have alternative living arrangements included in a policy. [ citation needed] If a fire leaves your home uninhabitable, the policy can help pay for a hotel or other living arrangements.
World Trade Center case
Following the terrorist attacks of 11 September 2001, a jury deliberated insurance payouts for the destruction of the World Trade Center. Leaseholder Larry A. Silverstein sought more than $7 billion dollars in insurance money; he argued two attacks had occurred at the WTC. Its insurers – including Chubb Corp. and Swiss Reinsurance Co. – claimed the “coordinated” attack counted as a single event. In December 2004, the federal jury decided in Silverstein’s favor. [1]
In May 2007, New York Gov. Eliot Spitzer announced more than $4.5 billion would be made available to rebuild the 16-acre WTC complex as part of a major insurance claims settlement. [2]
Post-Hurricane Katrina property insurance claims
Alan Kanner, an attorney in a Katrina related trial, asked jurors whether Allstate had done “a good job adjusting or not? At the end of the day, 94 percent of these cases are just adjustment cases.” [3]
Florida Consumer Choice Act
On June 24, 2009, Fla. Gov. Charlie Crist vetoed the Consumer Choice Act (H.B. 1171). The bill would have trumped state regulation, and allowed Florida's biggest insurance companies to establish their own rates. [4] State Farm Florida expressed its disappointment with Crist's veto of the bill the company said "would have given consumers more options in their choice of a property insurer. It would have attracted more capital to the property insurance market in Florida." [5] State Farm had proposed a 47.1% property insurance rate increase for Floridapolicyholders. As a result of Crist's move, State Farm plans to drop coverage for more than 700,000 homeowners by 2011. [6]
Ted Corless, who has represented large insurance carriers like Nationwide, remarked on State Farm's pullout from Florida to an Orlando television news station:
"I think that homeowners are really going to have to look out for themselves," Corless said. [7]
Five days following Crist's veto of the Consumer Choice Act, Corless defended property insurance deregulation on WFLA's AM Tampa Bay, when he pointed out, "If the blue-chip insurance companies wanted to price themselves out of the market, then they'll go out of business."
“The governor says he’s protecting the consumers’ choice but, in reality, he’s making it for them,” Corless added. “In a free market, all companies would be available to property owners and if a homeowner doesn’t like the price, he or she moves on. This veto limits those options and ties the hands of the blue-chip companies. [8]
Fire insurance in India
Fire insurance business in India is governed by the All India Fire Tariff [1] that lays down the terms of coverage, the premium rates and the conditions of the Fire Policy. The fire insurance policy has been renamed as Standard Fire and Special Perils Policy. The risks covered are as follows:
Dwellings, Offices, Shops, Hospitals (Located outside the compounds of industrial/manufacturing risks) Industrial / Manufacturing Risks Utilities located outside industrial/manufacturing risks Machinery and Accessories Storage Risks outside the compound of industrial risks Tank farms / Gas holders located outside the compound of industrial risks
Perils Covered - Cause of Loss
Fire Lightning Explosion/Implosion Aircraft damage Riot, Strike Terrorism Storm, Flood, inundation Impact damage Subsidence, landslide Bursting or overflowing of tanks Missile Testing Operations Bush fire etc.
Exclusions - Loss or damage caused by war, civil war and kindered perils
Loss or damage caused by nuclear activity
Loss or damage to the stocks in cold storage caused by change in temperature
Loss or damage due to over-running of electric and/ or electronic machines
Claims In the event of a fire loss covered under the fire insurance policy, the Insured shall immediately give notice there of to the insurance company. Within 15 days of the occurrence of such loss the Insured should submit a claim in writing giving the details of damages and their estimated values. Details of other insurances on the same property should also be declared.
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