As the name suggests this section provides cover for damage caused by fire.  Its important to note that this section also provides cover for;

• Storm Damage – wind, rain, hail etc
• Malicious Damage – damage caused by acts of vandalism
• Impact Damage – damage caused by impact from motor vehicles, tree limbs, and objects falling from the sky.
• Lightning Strike

The vast majority of claims made under this section relate to storm damage rather than actual fire.

It is also important in this section to ensure that you have cover for the removal of debris following a claim.  Some policies will automatically include the cover, others will require a sum insured to be nominated.  Costs that are covered under this include hire of equipment ie trucks, excavators etc as well as the tip costs.

Care must be taken in setting sums insured in this section as most fire policies have an average or co-insurance clause.  This clause requires the full replacement cost be represented in the sum insured.  By way of simple example if a buildings true replacement value is $200,000, and the policy has an 80% Co-insurance clause, to satisfy the clause the building needs to be insured for no less than $160,000 ($200,000 @ 80%).

If in this circumstance the building is only insured for $80,000, the insurer will apply a 50% deduction to any claim made as the sum insured represents 50% of the required sum insured.  So if a loss of $10,000 occurs the insurer will only pay $5,000.