Fire Insurance   is  a  contract of indemnity by which the insurer, for a consideration, agrees to indemnify  the  insured  against  loss...

Fire Insurance  is  a  contract of indemnity by which the insurer, for a consideration, agrees to indemnify  the  insured  against  loss  of  or  damage  by  fire, lightning, windstorm, tornado or earthquake and their allied risks, when such risks are covered by  extension  to  fire  insurance  policies  or  under  separate policies. (Sec. 167)

The liability of an insurer is to pay for direct loss only.  The insurer may be liable to pay for consequential losses if covered by extension to such fire policies or insured under separate policy   

In order that the insurer may rescind a contract  of fire insurance for any alteration made in the  use  or  condition  of  the  thing  insured,  the  following requisites must be present:    
1.     The  use  or  condition  of  the  thing  is  specially  limited  or  stipulated  in  the  policy;
2.     Such use or condition as limited by the policy is altered; 
3.     The alteration is made without the consent of the insurer; 
4.     The alteration is made by means within the control of the insured; and
5.     The alteration increases the risk.   
A contract of fire insurance is not affected by any act of the insured subsequent to the execution of the policy, which does not violate its provisions even though it increases the risk and is the cause of the loss. (Sec. 170)

DISTINCTIONS OF OCEAN  marine  and fire policies
Ocean Marine is a policy of insurance on  a  vessel  engaged  in  navigation is a contract  of  marine  insurance  although  it  insures  against fire risks only. Whereas in Fire Insurance, the hazard is fire  alone and the subject is  an  unfinished  vessel,  never afloat for a voyage,  the contract to insure is a  fire risk, especially in the  absence  of  an  express  agreement  that  it  shall  have  the  incidents  of  marine policy, or where it  insures  materials  in  a  shipyard  for  use  in  constructing vessels.    Also  where  a  policy  insures  against  fire,  a  vessel while moored and  in use as a hospital

1.     In  marine  insurance,  the  rules  on  constructive total loss  (Secs. 131, 139)  and abandonment (Sec. 138) apply but  not in fire insurance;  
2.     In case of partial loss of a thing insured  for less than its actual value, the insured  in a marine policy is a co‐insurer of the  uninsured portion (Sec. 157), while  the  insured may only become a co‐insurer  in  fire  insurance  if  expressly  agreed  upon by the parties. (Sec. 172)

Measure of indemnity in open and valued policies in fire insurance
In Open Policies, the expense  necessary  to  replace  the  thing  lost  or  injured  in  the  condition  it  was  at  the  time  of  the  injury.   While in Valued Policies, the parties are bound by the valuation, in the absence of fraud.    

co‐insurance clause
It  requires  the  insured  to  maintain  insurance  to  an  amount  equal  to  the  value or specified percentage of the value of the  insured property under penalty of becoming coinsurer to the extent of such deficiency.   
The insured is not a co‐insurer under  fire  policies in the absence of stipulation.   

fall of building clause
It provides that, in a fire insurance  policy,  if  the  building  or  any  part  thereof  falls, except as a result of fire, all insurance by the  policy shall immediately cease.    

option to rebuild clause
It gives the insurer the option to rebuild the destroyed  property  instead  of  paying  the  indemnity.  This  clause  serves  to  protect  the  insurer against unfair  appraisals  friendly  to  the  insured. (Sec. 172)
The author takes no responsibility for the validity, correctness and result of this work. The information provided is not a legal advice and it should not be used  as a substitute for a competent legal advice from a licensed lawyer. See the disclaimer

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