General terms in Fire insurance :

Insurer :Insurance Company.

Policy holder: Applicant for purchasing insurance policy (client/customer).

Object of insurance :Residential home, industrial or non-industrial unit.

Fire value of building: Construction price of building without the value of site.

Residential unit :A place that is not for work and business and is used only for residence.

Industrial centers:: Centers in which industrial activities are performed such as car factories, home-appliances factories, etc.

Non-industrial centers: Centers in which any type of activities but industrial activities are performed such as stores, hospitals, cinemas, medicine supply centers, etc.

Major risks or coverage :Fire, explosion, lightning.

Types of Fire Insurance

Generally, places and centers that are covered under fire insurance are divided into three groups:

  • Fire insurance of residential units:
    In fire insurance of residential units the object of insurance is building, installations, and household appliances that are covered against fire risks, explosion, lightning as major risks; and storm, flood, earthquake and volcano, water pipe bursting, damages due to rainwater and snow-melt, crash of aircraft, helicopter and their parts, house appliances and furniture, theft and many other risks. Residential units can be insured by two individual or group methods. Once the policyholder purchases group insurance policy which covers more than 15 residential units, group discounts are also granted.
    Fire insurance of residential units is provided in the form of the following plans:
    • Public plan fire insurance
    • Home and family comprehensive plan fire insurance policy
    • Ordinary home fire insurance policy
    • Fire insurance policy for homes with flood and earthquake coverage
    • Mehr fire insurance policy

Public plan fire insurance policy: The advantage of this plan with regard to residential homes fire insurance is that the flood consequential risk is also among the liabilities of Bimeh Iran (Iran Insurance Co.), without requesting for additional coverage. The reason for this issue as a public plan is that all general and usual risks such as fire, lightning, explosion and flood that are common risks for all houses are covered. (Iran Insurance Co. started issuing the Public Plan since 2001).
Numerous covers are introduced under each of these plans. The plans include home to home plan, family mental health, computer insurance plan, comprehensive tourists plan, home and family comprehensive plan, public fire insurance plan, industry and production insurance plan, farmers insurance comprehensive plan, insurance plan for workers and house members of workers, Mehr plan, marriage portion insurance plan and marriage dowry insurance plan.
In most of these plans, different insurance coverage of persons and particularly fire are among the major obligations of Bimeh Iran and sometimes provide liability insurance. Public Plan fire insurance is one of the plans that cover flood in addition to major fire risks at a very nominal insurance premium.

House and family comprehensive plan Fire insurance policy: This is one of the public plans of Bimeh Iran (Iran Insurance Co.), designed since August 2003 and introduced by the representatives of the company referring to the people’s homes.

Ordinary Fire insurance policy for residential homes: Upon request of policyholder in this insurance policy, in addition to fire risks, explosion and lightning, the residential building is insured against all additional risks mentioned above with desired capital and at day price and its annual insurance premium should be calculated according to the value of building and house furniture and the insured risks.

Mehr Plan Fire insurance policy: This plan that covers different fire insurance, liability and home and family accidents was launched for the first time on 12th October, 2003.

The plan covers the following insurance: Building, installations and household furniture against fire risks, explosion and lightning. Policyholder’s liability against physical damages incurred on third parties and neighbors due to the undertaken risks.
Policyholder’s liability against financial losses incurred on third party and neighbors due to the undertaken risks.
Indemnity on death and partial or permanent physical defects of policyholder or the family members, due to incidents caused during any time of the day or night.
Compensating for medical expenses incurred by accidents to policyholder or to the members of his family, any time of the day or night.
Duration of the insurance policy may be extended from two to five years upon the request of the insured. If the insured applies for coverage of additional risks such as flood, earthquake or storm, this will be covered through attachment.

  • Fire insurance policy for non-industrial centers
    Non-industrial centers include all commercial stores, repair shops, hospitals, public places, office buildings, real estate agencies, medical centers, foodstuff and protein stores, educational institutes, service centers, and other similar centers or cases. Buildings, installations, fixed furniture, stock, and decoration of each of the centers could be insured with Bimeh Iran (Iran Insurance Co.) at the day’s price against the risks of fire, explosion, lightning and additional risks.
    Property value fluctuations on sum insured: If a property has been appraised at a price below the real value of insurance, the insurer should be responsible proportionately to the amount it has insured at the real value of property. Any property has a current and real price and the policyholder should be bound to insure his property at that price. If a policyholder does not insure his property at the real price, this means that he has not insured all of his property; he will pay lower insurance premium and will receive less indemnity for the incurred damages. This rule which is called damage relative rule or the rule of balance of the insured amount and the damage is applied and implemented for preserving rights of the insurer and also observation of balance and fairness in the rights of policyholders. But if the insurer and the policyholder (insured) agrees that according to a specified formula such as first loss insurance in fire insurance, the object of insurance is insured at an agreed value that is lower than its real value, the insurer should not be authorized to apply capital value rule.