The necessity of fire insurance

Some people may not know that everyone has insurance coverage for their homes. Since homes are high-value assets, a major disaster, such as a fire, can damage your home and cause significant repair costs. Therefore, fire insurance is an option that provides protection against such unexpected events. Today, we'll take a look at the details.

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What is fire insurance?



Fire insurance is a mandatory insurance policy that projects must provide for customers applying for loans and registering collateral with financial institutions. Therefore, it's absolutely essential. Since it's mandatory, banks must notify customers immediately upon loan application. Fire insurance coverage begins on the date of the transaction.

It provides protection for buildings and structures against catastrophic damage caused by force majeure, such as fire, electrical short circuits, and cooking gas explosions. Occasionally, it may also cover water damage (excluding flooding) or other natural disasters, depending on the policy details.

Most provide short-term coverage of approximately 1-3 years, requiring the borrower or homeowner to pay premiums each period.

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What factors affect fire insurance premium rates?

Fire insurance premium rates are variable and depend on the terms and conditions of each insurance company. However, pricing is typically determined by the following factors:

- Type of building (determined by the materials used for the structure, walls, and floors) and location
- Type of hazard of the insured premises (isolated/non-isolated hazard)
- Type of use

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What types of coverage does fire insurance provide?

Fire insurance provides coverage for residential properties such as single-family homes, townhouses, commercial buildings, flats, or condominiums. It provides coverage for fires caused by the following events:

- Fire
- Various explosions
- Lightning strikes, including damage to electrical appliances caused by lightning short circuits
- Weather conditions, storms, hail
- Automobile and other vehicles
- Aircraft damage or objects dropped from an aircraft
- Water damage (excluding flooding)

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In the event of a fire, compensation will be provided for the following property:

- Residential buildings (excluding foundations)
- Condominiums, apartments, flats, or condominiums
- Property within the building, such as furniture, electrical appliances, etc.
- Other high-value property, such as computers, machinery, etc.

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However, although fire insurance provides coverage for fires, there are some exclusions, including:

- Fires in which the insured is aware of or involved
- Damage caused by burning property by an authorized official
- Perils of war, terrorism, riots, invasion, political unrest, sabotage, or strikes
- Nuclear explosions, the release of radioactive materials, or nuclear waste

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Furthermore, some types of property are not covered by home fire insurance, including:

- Goods under the insured's care Or as a custodian:
- Silver bars, silver jewelry, gold bars, gold jewelry, gems, or valuables
- Antiques, artifacts with a combined value exceeding 10,000 baht
- Important documents, blueprints, diagrams, drawings, designs, account books, including currency and banknotes
- Electrical appliances, circuit boards, electronic devices, wires, or light bulbs damaged by overloading
- Explosives
- All types of vehicles, whether land, water, or air

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Things to Know Before Choosing Fire Insurance

There are many fire insurance companies to choose from. PropertyScout recommends that you consider the various conditions before deciding on an insurance policy. Consider these factors:

- Read the policy terms and compare them carefully to protect your own interests.
- If you insure more than one property, the insurance company will split the liability for damages in half, not double the compensation.
- Choose a company that provides coverage or compensation of at least 70% of the property value, as fires can cause severe damage to the surrounding area of the home. Therefore, it should be chosen to cover the majority of damage costs.
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Thank you for the great information from propertyscout.