Question

The main element(s) of a fire insurance contract is/are _________________.

• A. In fire insurance, the insured must have insurable interest in the subject matter of the insurance.
• B. All of the above
• C. The contract of fire insurance is a contract of strict indemnity.
• D. The contract of fire insurance is a contract of utmost good faith.

Answer 1

Answer: (B)

All the above are strictly the features of a contract of insurance. Fire Insurance contract is no different from an insurance contract and thus, these are also the features of a fire insurance contract.

The insured must have an insurable interest in the subject matter of the contract both at the time of taking the policy and as well as at the time of taking the claim for loss or damage.

In this case also the insured must disclose all the material facts such as fire detection and fire fighting equipment, nature of their use, etc. It is a contract of indemnity as the insured can claim only the actual damages from the insurer.