FIRE INSURANCE
• Fire insurance is a form of property insurance
which protects people from the costs incurred
by fires. When a structure is covered by fire
insurance, the insurance policy will pay out in
the event that the structure is damaged or
destroyed by fire. Some standard property
insurance policies include fire insurance in
their coverage.
• Depending on the terms of the policy, fire
insurance may pay out the actual value of the
property after the fire, or it may pay out the
replacement value. In a replacement value
policy, the structure will be replaced in the
event of a fire.
Types of Fire Insurance Policies
1. Valued policy:
When the agreed value of the subject matter
is mentioned in the policy is named as valued
policy. This value may not necessarily be the
actual value of the property. In the event of
loss by fire the insurer pays the admitted
value of the property.
2. Unvalued policy:
An unvalued policy in one in which the value
of the subject matter is not declared at the
time of policy taken. But in case of loss the
value is computed by assessment. This is also
called an open policy.
3. Specific policy:
In case of specific policy, the property is
insured for a definite sum. If there is loss, the
stated amount will have to be paid to the
policyholder. But the actual value of the
subject matter is not considered in this
respect.
• For example
If a policy is taken for Rupees 20,000 upon a
building whose actual value is Rs.1,00,000 and
a fire occurs causing the amount of loss
Rs.20,000. The insurance company will pay the
whole amount of loss of Rs.20,000 irrespective
of the fact that the building was insured for
one-fifth of its value.
4. Average policy:
An average policy is one which contains the
average clause. This clause required the
insurance company to pay only that portion
of the loss which is borne by the insured
amount to the actual value of the subject
matter of the insurance.
• For example:
A value of the property is Rs.1,00,000. It is
insured for Rs.60,000 (60% of the total value)
and the amount of loss is Rs.60,000. The
insurance company will not pay Rs.60,000 to
the policyholder but will pay Rs.36,000 (60%
of Rs.60,000).
Some of the other types are:
5. Floating policy
6. Stock declaration policy
7. Loss of profit policy
8. Standard fire policy
9. Reinstatement policy
[Link] Policy
[Link] leakage policy
[Link] policy
Things to be considered
• When purchasing fire insurance, people
should be aware that some types of fires may
not be covered. For example, a fire caused by
an earthquake might be excluded from a fire
insurance policy.
HEALTH INSURANCE
• Health Insurance (popularly known as
Mediclaim) offers protection in case of
unexpected medical emergencies. In case of a
sudden illness or accident, the health
insurance policy takes care of the
hospitalization, medical and other costs
incurred.
• Health insurance in a narrow sense would be
‘an individual or group purchasing health care
coverage in advance by paying a fee called
premium.’
• In its broader sense, it would be any
arrangement that helps to defer, delay, reduce
or altogether avoid payment for health care
incurred by individuals and households.
Types of Health Insurance
1. Major Medical:
In Major Medical Insurance, the insured is
responsible for paying a deductible before insurance
pays benefits. Then, the insurance companies pay
80% of the medical bills and the insured would be
responsible for the remaining 20%. The insured can
choose to go to any doctor or hospital to receive
services, pay the provider directly, and then be
reimbursed 80% of the bill by the insurance
company.
2. HMO:
An HMO, Health Maintenance Organization, is a type of
insurance plan that focuses on the long term care of its
insured and is normally less expensive than a Major
Medical Plan. Each patient has a Primary Care Physician,
who is responsible for providing preventive care and
coordinating care for the patient if additional specialists or
hospitalization is necessary. This keeps costs down. In
addition, limiting choices, such as choosing physicians only
within a network and not covering services that are
deemed unnecessary, controls costs.
3. PPO:
A PPO, Preferred Provider Organization, is similar to an HMO
as there is a network of physicians, but unlike an HMO in
that an insured is not limited to network physicians and can
see any doctor they choose. However, co-payments and
deductibles will be less for in-network services. In addition,
network physicians determine reasonable charges
therefore, if an out-of-network physician charges more for
services, the insurance company will still pay only 80% of
the in-network charges. The insured will often pay higher
fees for out-of-network services.
4. POS:
A POS, Point of Service, is considered to be a
combination of a PPO and an HMO. The insured
chooses a Primary Physician and all health care should
start with the patient consulting this physician. This
doctor authorizes a referral to a specialist, in or out of
the network. (In HMOs, specialists must be within the
network for the insured to be covered.) If a patient
sees a specialist without a referral, the insurance
company may choose not to pay for the services.