Fire insurance is a specialized form of insurance beyond property insurance and is designed to cover the cost of replacement, reconstruction or repair beyond what is covered by the property insurance policy. This insurance policy typically contains general exclusions, such as war, nuclear risks, and similar perils. The system of fire insurance cannot save the society from the economic loss to the community to the extent of the property lost by fire, but it compensates someone and this saves him from a ruinous loss, at the cost of a group of some others.
Fire insurance means insurance against any loss caused by fire. Section 2(6) of the Insurance Act defines Fire insurance as follows:
“Fire insurance business means the business of effecting, otherwise than incidentally to some other class of business, contracts of insurance against loss by or incidental to fire or other occurrences customarily included among the risks insured against in fire insurance policies.”