US Fire Insurance, USA Fire Insurance, Fire Insurance US, Fire Insurance USA

By: EconomyWatch   Date: 26 May 2010

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The US fire insurance policy takes care of loss of property due to the outbreak of fire. Fire, lightening and gas explosions arising out of a domestic core are some of the perils that fall under the USA fire insurance policy.

What are the Items Covered under the USA Fire Insurance Policy?

US fire insurance provides protection to the following properties and belongings in the event of damage due to fire:

  • Buildings
  • Furniture, fittings and fixtures
  • Stock in trade
  • Plant and machinery

    • The standard fire insurance US policy, however, might not necessarily cover the contents within the property or the medical bills. It is advisable to consult an insurance agent to know more about what is generally covered.

    How the Concept of US Fire Insurance came into Being

    In 1752, Benjamin Franklin started the Philadelphia Contributionship, the first fire insurance company. The concept of insurance started spreading in the US after 23 New York-based local fire insurance companies went bankrupt due to loss caused by hazardous fires. The estimated loss approximated $26 million. This incident motivated more and more USA fire insurance companies to start out-of-state insurances. Insurance departments were established in four states by 1860.

    From 1880 to 1889, the average rate of increase in the insurance coverage was 4.6% per year, with the overall estimated at 50%. Almost 60% of the burned property in the US was insured in 1890. However, it wasn’t until 1910 that the percentage of insured burned properties reached 70%.

    In 1943, the standard US fire insurance policy was taken up in New York. The state insurance departments in most of the states adopted this policy as a paradigm through regulation. The purpose was to simplify the adjustment of losses and make the process easy to understand for the policyholder. This resulted in mitigating the legal actions on disputed claims. Before 1960, all the states had passed US fire insurance laws.

    How can you Save Money on a US Fire Insurance Policy?

    The amount of premium depends upon the risk factor. The more risk an insurer bears, the more rates are quoted by the insurance companies. The first step is to take all measures to make the property fire-safe, such as only using fire-proof roofing material during construction. One can also consider buying a home close to a fire station. It is advisable to put up smoke detectors in all rooms within the property. All these measures reduce the risk factor and therefore the premium quoted.


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