A fire insurance policy is designed to protect your property from losses or damages caused by unexpected fires. It ensures that your home, office or factory can be protected from such incidents without severe financial setbacks.

However, not all assets are automatically covered. Understanding what is not included in a fire insurance policy is as important as knowing what is, so you don’t face any surprises at claim time.

Understanding Fire Insurance Coverage

Fire insurance primarily covers tangible assets like buildings, machinery, furniture and stock-in-trade. It is an essential safeguard for both homeowners and businesses because it compensates for direct losses arising from accidental fires, lightning or explosions.

But property protection is not limited to fire alone. Many individuals also choose burglary insurance to protect their valuables against theft or forced entry.

While fire insurance compensates for damages caused by fire and related perils, burglary insurance covers loss from break-ins or robberies. Together, these policies provide well-rounded security for your property and contents, but it is vital to know the limitations of each.

What is Not Included in a Fire Insurance Policy?

Even the most comprehensive fire policies have exclusions. These are items or circumstances that are either high-risk, volatile in value or outside the insurer’s standard liability scope. Below are some assets commonly not covered under a standard fire insurance plan.

• Precious Metals and Jewellery: Due to their fluctuating market value and theft risk, these items are usually excluded unless you opt for a special endorsement.
• Works of Art, Antiques and Rare Collectables: Their uniqueness makes it difficult to assign a fixed value, so they require specialised valuation and additional coverage.
• Cash, Securities and Valuable Papers: Standard fire insurance does not cover paper-based financial instruments, bonds or currency since they can’t be easily verified post-loss.
• Explosive or Hazardous Materials: Assets stored with chemicals, gases, or explosives are excluded due to their inherent fire risk and regulatory restrictions.
• Electronic Data or Software: Damage to computer programs, data files, or digital records is not covered unless a cyber or data restoration add-on is purchased.
• Damage due to War, Nuclear Activity or Terrorism: Losses arising from war-like operations, civil commotion or nuclear incidents are excluded unless the policyholder opts for an extended coverage like Terrorism Damage Cover.
• Property Under Construction: Buildings still under construction or renovation often fall outside standard coverage unless specifically declared in the proposal form.
• Machinery Under Test or Installation: Equipment being tested or installed is usually excluded due to the increased likelihood of damage during operation.
• Vehicles, Aircraft or Watercraft: Movable vehicles or crafts are not covered unless they are fixed assets forming part of the insured premises. These require separate motor or aviation insurance.
• Loss of Profits or Business Interruption: While property damage is covered, the resulting loss of income is not, unless you opt for a Business Interruption add-on.
• Electrical or Mechanical Breakdown: Fire caused by short-circuits may be covered, but damage due to internal mechanical or electrical failure is not, unless additional coverage is purchased.
• Minor Damages or Wear and Tear: Gradual deterioration, corrosion or regular maintenance-related damages are not covered as they are not “sudden” or “accidental” in nature.

Ensure Comprehensive Coverage with TATA AIG

Knowing what is excluded is the first step toward complete protection. With TATA AIG’s Fire and Burglary Insurance solutions, you get transparent coverage, easy-to-understand policy terms and customisable add-ons that fit your specific needs.

Whether you want to secure your business assets or personal property, TATA AIG ensures flexibility, reliability and quick claim settlements, helping you safeguard every asset that matters most.