A fire insurance policy is a contract to indemnify the insured for destruction of or damage to property caused by fire. Many different kinds of insurance are available. They tend, however, to group themselves into a few categories in terms of the nature of the interest protected.
There must be an actual flame or burning which is accidental or which has escaped from its proper confines, that is, a hostile fire. Damage from heat alone is not covered, but damage from heat or smoke caused by a hostile fire is covered.
Notice and Proof of Loss
Fire insurance policies commonly provide that the insured must give the insurer notice of his lose and file a detailed statement of the loss within a certain period and in a certain manner. If proof of loss in not furnished within the time specified by the statue or policy, the insurer generally is not liable.
Either or both the mortgagor and mortgagee may take out policies of fire insurance to protect their respective interests in property. In the absence of a contrary stipulation, the policy taken out by either covers only his own interest. When one policy protects both parties as their respective interests may appear, it is generally provided that the insurance of the mortgagee shall not be affected by any act of the mortgagor.
In the case of fire insurance policies to protect homes and buildings, it is common to include extended coverage by which the property is insured against hazards in addition to that of fire. The term extended coverage generally refers to protection against loss from windstorm, hail, explosions other than those within steam boilers on the premises, riot, civil commotion, aircraft damage, vehicle damage, and smoke damage.
Fire insurance policies commonly prohibit the insured from doing certain acts that will or may increase the hazard or risk involved and provide that the policy is void if the insured commits the prohibited acts.