Write Short Notes on the following: Types of fire insurance policies

Write Short Notes on the following:
Types of fire insurance policies

ANSWER:

The following are some of the various types of fire insurance policies:
i. Valued policy - Under this policy, the insurer is liable to pay the insured the value stated in the policy, irrespective of the actual value of loss suffered by the insured.
ii.  Specific policy - Under this policy, the insurer is liable to make the payment for the loss incurred for a certain specified amount. In case the loss is greater than the amount specified in the contract, the insured has to bear that extra loss incurred.
iii. Floating policy - This policy is usually taken by big businessmen to cover the risk of fluctuations in the stock of goods held in different stations, ports, etc.
iv.  Reinstatement policy - In this policy, the insurer can re-establish the destroyed property or goods destroyed by fire instead of making payments in cash.