Important Points for IC 57 - Fire and Consequential Loss Insurance Exam
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Fire insurance premium rating is based on certain basic principles. i. Firstly, the rate of premium must be commensurate with the physical hazards involved, ii. Secondly, classification of risks, based on hazards evaluation, into homogeneous groups, is adopted. Each group comprises risks exposed to more or less, the same degree of exposure, iii. Thirdly, the rate of premium is based on the past loss experience of each group, iv. Fourthly, the principle of discrimination differentiates individual risks within a group taking into account favourable and unfavourable features present. Thus, discounts in the premium are granted.
In Simple risks (Section III), of the Tariff prescribes rates for 4 types of simple occupancies. Some examples are: i. Dwellings, Offices, Colleges, Hospitals, Showrooms where goods are kept for display and no sales are carried out, ii. Restaurants, Hotels, iii. Shops (non-hazardous goods), Laundries, Amusement Parks, iv. Shops (hazardous goods).
In Industrial/Manufacturing risks (Section I Rates are provided for about 205 industrial/manufacturing risks arranged in alphabetical order. The rates under this Section shall be uniformly applicable to the entire insured property in the same industrial compound. This is known as ?One risk one rate?.
The Utilities (Section provides rates for utilities located outside the industrial/manufacturing risks (Stand Alones).
Rates are provided in Storage risks (Section VI) for different types of goods stored in godowns/silos or in the open outside the compound of industrial/manufacturing risks.
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