Fire Insurance Contract

Fire insurance contract may be defined as "an agreement, whereby one party in return for a consideration undertakes to indemnify the other party against financial loss which the latter may sustain by reason of certain defined subject-matter being damaged or destroyed by fire or other defined perils up to an agreed amount."

The party responsible to indemnify the loss is called the insurer, the party who is to be indemnified is called the insured, the consideration for the contract is termed 'the premium', the defined subject-matter is termed 'the property insured" the sum set forth in the contract is called the assured sum, and the document containing the terms and conditions of the contract is known as 'the policy.
Before discussing the elements of the fire insurance contract, the special meaning of the 'Fire' must be understood.

Fire:

Fire, in order to make the insurer liable under the contract, must satisfy two conditions. First, there should be actual fire or ignition, and second, the fire must be for tuitions in its nature.

Ignition:

The expression in the policy we have to construct is loss or damage occasioned by fire. This means that loss or damage must be either by ignition of the article or property or premises or part thereof. In other words, the damage should be occasioned by fire.
Loss or damage caused by excessive fire heat cannot be included in 'loss or damage by fire'. If should be proved here, that the loss should be caused by fire.
The cause of fire is not important. The fire even if caused by the negligence of the servant or himself may come under the definition of fire. There should be no fraud or willful misconduct by the assured. There should be actual ignition but a process resembling fire may not be fire.

Fire should be accidental and not intentional:

Any loss caused by fire lighted purposively is not a loss by fire if it was intentional. However, the property burned accidentally in an ordinary fire, such as domestic fire, the loss is covered even if the fire remains under control. When a fire was purposively lighted but became out of control at a later stage is taken under the definition of fire. The object of fire insurance is to indemnify the insured against accidental loss by fire.