Before we understand how to file a claim post a fire incident, it is essential to understand the policy document and read its fine print.
Recent fire at a restaurant in Kamala Mills and many such fire incidents in Mumbai and Bangalore are eye openers for residents and commercial premises owners. Are we aware of risk to our properties and open to transfer the risk of fire to insurance companies? India is still a country of small and medium enterprises. Businesses are run traditionally and business owners run the businesses by ignoring risk of any accidents or damage to his own property, surrounding property or to human lives, be it his own employees, workers or the clients or any third party.
Why try to save on cost of insurance premium and suffer heavy financial losses and public liability litigation? Does one get permission or license to run the business from the approving local authority without proper risk mitigating steps or inspection of risk, proper firefighting equipment, trained manpower or insurance policy for that matter?
We want to be the fastest developing country but are we following their footsteps in the way businesses are run? If you want to do any business in any developed country, insurance policy for property, people and liability would be first requirement.
If we do survey for offices and homes that are insured in the city, you would be amazed that not more than 5% would be insured.
Before we understand how to file a claim post a fire incident, it is essential to understand the policy document and read its fine print. Fire insurance is one of the oldest forms of insurance and considered as a basic requirement of security. Fire policy covers loss to property by fire, flood, storm, cyclone, earthquake,etc. The sum insured mentioned on the policy and the clauses attached to the policy plays an important part on what amount one would get as claim from the insurer.
Steps to be taken post occurrence of fire:1. Insured should take immediate action to put off the fire once it’s noticed.
2. Fire brigade and police should be immediately informed.
3. Insured should take all the necessary steps to protect the insured assets as if he is uninsured.
4. One must verify his policy document for coverage, location address etc.
5. Insurer is to be informed over mail stating date of loss, about the nature and quantum of the claim to appoint an independent surveyor and loss assessor.
6. Insured should preserve all the damaged property and take out photographs/videography.
7. Maintain a separate account for all the expenses incurred in restoring the damage to the original state i.e. just before the fire occurred.
8. Not to dispose of any salvage or any damaged property without approval from surveyor as after the fire till such time claim is settled damaged property belongs to insurer.
9. One can take the assistance of Architect/Surveyor & Consulting Engineer.
10. All the necessary co-operation is to be extended to the surveyor (surveyor is independent professional appointed by insurer to assess the loss); also assist him in getting him the claim details, Fire brigade report, police report, providing all the required documents, quotations/bills of repair or replacement of the damaged assets, assisting in getting the salvage disposed.
11. Please note that sum insured for property should represent present day replacement cost and or otherwise claim would have proportionate deduction on account of under insurance.
12. Insurance policy normally has an excess clause of 5% of the loss amount or minimum of Rs.10000 for sum insured less than Rs 10 crore, which would get deducted from the loss assessed.
13. Once the loss is assessed, surveyor takes your consent before sending it to the insurer.
14. Based on the final survey report, insurance company settles the claim. If there is any dispute in the settlement, one can approach grievance cell of the insurer and /or ombudsman/consumer courts depending upon the quantum the claim.
15. If any dispute or difference arises as to the quantum (liability being otherwise admitted), one can invoke arbitration provision.
Besides the above points, there are duties to be followed during the policy period for fire protection and prevention. An adequate number of portable fire extinguishers must be suitably located in each floor and “No Smoking Zones” rules must be enforced. Lightning arrestors must be installed, utmost attention should be paid for good house-keeping and alarm system (hooter or siren) should be provided and periodical mock drills are to be arranged. Non- compliance to these may lead to prejudiced settlement of claim.(The writer is head, General Insurance Broking and Principal Officer with Emkay Global)