Fire insurance covers the material damages caused directly by fire, lightning, explosion, and resulting smoke, vapor, and heat on the insured property up to the insurance value.
Damages that occur due to a strike, lockout, disorder, civil commotion, terror, earthquake and volcanic eruption, the weight of snow, flood and submersion, landslide, storm, internal water, smoke, hit by car, land vehicles, vessels, aircraft, willful misconduct may also be included in the coverage of fire insurance with an additional contract.
Paintings, pictures, books, engraving, writings, statues, bibelots, collections, carpets and similar that are valuable in terms of art and antiquity as well as the models, patterns, plans and sketches, letters patent, documents, commercial books; cash, share certificates and bonds, valuable paper, any kind of gold and silver and jewelry made of these and other valuable metals and products, valuable stones and pearls and similar may be included in the coverage provided to specify their insurance values separately in the policy.
If the beneficiary changes within the contract period, the provisions of insurance remain, and the rights and liabilities of insured under the contract are transferred to the new right owner. In case of change, the new right owner becoming aware of the insured/insurance holder and insurance is obliged to inform the situation of the insurer in 15 days. The insurer and new right owner may terminate the contract in 8 days from the date of becoming aware of the change, and of the presence of insurance for the latter. The right of termination is forfeited if not exercised within its specified period. Premium for the period until the date termination takes effect is calculated on a daily basis and extra premiums are returned to the new right owner. Insured and the new right owner not exercising his/her right of termination are liable together for the premium debts payable at the time of change in the owner of insured property.
In case of death of insured, all the rights and liabilities under the contract pass to the new right owner.
Premium total in fire insurance and additional coverage other than earthquake and volcanic eruption provided further to the fire insurance (strike, lockout, disorder, civil commotion, terror, flood and submersion, landslide, storm, internal water, smoke, hit by car, land vehicles, vessels, aircrafts, willful misconduct) is freely determined by insurance companies. In case of adding coverage for earthquake and volcanic eruption in the fire insurance, the provisions of Tariffs and Regulations on Facultative Earthquake and Volcanic Eruption Coverage will be applicable.
The policyholder is liable to fulfill the following in case of a claim:
1- Notifying the insurer within no later than 5 working days from the date of becoming aware of the risk.
2- Taking necessary recovery and protective measures just like not having an insurance policy; and making best efforts to comply with the instructions of insurer for this purpose.
3- Allowing the insurer and persons authorized by the insurer to have access to damaged buildings and locations, to take the delivery of, seize and guard the same and attempt to reduce the damage for reasonable purposes and in suitable ways.
4- Avoiding making any change in the location or property damaged except for mandatory cases.
5- Upon demand of insurer, presenting to insurer the necessary information and documents that are useful for determining the causes of risk in detail, determining the amount of damage and evidences, and for exercising the right of recourse and that are possible to provide for the insured, without delay.
6- Providing the insurer with a written notice indicating estimated amount of damage within a reasonable and suitable period of time.
7- Allowing the insurer and the representatives authorized by the insurer to make research and investigations on the insured locations or property and on related documents in order to determine the indemnity obligation and amount and the rights of recourse.
8- Informing the insurer if there are any other insurance contracts regarding the insured location and property.
The insurer is obliged to complete necessary investigation, determine the amount of damage and indemnity and notify to the insurance holder within 1 month as of the date the documents regarding the amount of damage are presented to the insurer.
There are 3 methods for calculating the insurance indemnity:
In case of absence of any provision in the policy with regards to the calculation of insurance indemnity, indemnity value (market value) of insured property at the time of risk is considered. However, the insured and insurer may agree on indemnification over the replacement cost (new value) of policy. In this case, the policy would specify that indemnification is over the replacement cost (new value) of policy.
For the policies indemnified on the basis of market value, the value losses resulting from the share of aging, wearing, tearing, usage and other reasons are deducted in indemnification payments for the assets included in the coverage; and, specific performance and quality differences of the new ones are deducted from indemnification, if any.
For the policies indemnified on the basis of new value (replacement cost of the new including also the shipment, assembly, customs, tax expenses, dues, and fees) and for the payment of indemnification of assets included in the coverage;
- The replacement cost determined based on the rebuilding or purchase cost of asset as the subject of policy at the location and date of risk is considered, provided that the maximum rate or age specified in the policy for the share of aging, wearing, tearing, usage is not exceeded. However, the rights of insurer for discount resulting from incomplete insurance, salvage and specific technology difference are reserved.
- If the maximum rate or age specified in the policy for the share of aging, wearing and tearing (usage) is exceeded, the market value is considered as basis for the indemnification value.
Third method is the agreed value principle. The value of buildings, fixed wiring, machinery, fixtures or household property as the subject of insurance is determined by the experts selected by the insured and insurer unanimously and if accepted by the all parties then, the parties do not object to this value in the calculation of indemnity in case of risk.
Value list to be determined for contracts concluded on the basis of agreed value is valid for maximum one year insurance period. Expert fees are paid on the party demanding contract on the basis of agreed value. For commercial Commodities, insurance policies cannot be done on agreed value basis.