Fire insurance in India is governed by the All India Fire Tariff that lays down the premium rates, the terms of coverage, 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:
Fire Destruction or injure to the property insured by its own fermentation, likely heating or spontaneous burning or its going through any heating or drying process cannot be treated as damage due to fire. For e.g., paints or chemicals in a factory undergoing heat conduct and as a result got damaged by fire is not covered. Further, burning of property insured by order of any Public Authority is excluded from the scope of coverage.
Lightning Lightning may sometimes result in fire damage or other types of damage, such as a roof broken by a falling chimney hit by lightning or cracks in a building due to a lightning strike. Both fire and other types of damages caused by lightning are covered under the policy.
Explosion or Implosion Explosion is defined as a sudden, violent burst with a loud sound. An explosion is caused inside a vessel when the pressure within the vessel exceeds the atmospheric pressure acting externally on its surface. It may cause fire damage or concussion damage.
Implosion, on the other hand, refers to bursting inward or collapse. This takes place when the external pressure exceeds the internal pressure. This policy, however, does not cover devastation or damage caused to the boilers, economizers or other vessels in which steam is generated and machinery or apparatus subject to centrifugal force by its own explosion or implosion.