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The Evolution of Insurance: From Fire Marks to Fire Insurance Pools

Fire Marks

Times have changed substantially since the dog-eat-dog days of fire marks-distinctive plaques fashioned of lead or copper that home and business owners displayed on their property to indicate that it was insured against a fire. In the 18th and 19th centuries, fire insurance providers gave these plaques to policyholders who paid in advance for their protection. If a home or business caught fire, the fire insurance provider (who also ran the fire brigade!) would look for that all-important fire mark before going to the trouble of putting out the flames. If there was no fire mark to be found, they would turn around and leave, letting the building burn.

Insurance Fire MarksCold? Heartless? Mercenary? Try all of the above. One has to admit, though, that those old fire marks are pretty cool to look at today, if you can find one (they're still visible on some buildings in older American cities).

Modern Times

These days, fire insurance is handled in a decidedly less primitive fashion. For one thing, the insurance provider is not the one with the power to put out the fire. There are different degrees of fire insurance available: some plans can cover the physical building itself; others cover the structure as well as the belongings inside of it.

All contemporary fire insurance policies, however, generally have four distinct parts:

  • Part One pertains to the building itself, be it a home or business, and is termed the "insuring agreement." This part of the policy simply states the address of the building, as well as its monetary value.
  • Part Two is the definitions section of the policy. This explains what other buildings, if any, may be included. In the case of a home, this might include a garage or shed. The section also provides definition to key terms used in the insurance policy document.
  • Part Three of the policy details the exclusions, or, in layman's terms, what isn't covered by the insurance policy - both in terms of property and types of loss.
  • Part Four lays out just how much the insurance policy will pay in the event of a fire.

*More common are insurance policies, such as homeowner, condo owner or business owner policies, that combine fire insurance with other types of insurance such as liability.

Fire Insurance Pools

Some home or business owners have property in an area that is particularly vulnerable to fires; classification codes, known as Public Protection Classifications (PPC or PC). These range from 1 - the best, to 10 - the most scant fire protection. Home and business owners with property in areas with high Protection Class ratings may find that the cost of fire insurance is exorbitant, or that they can't even find a provider to sell them a policy. Fortunately, there are state-run pool plans that enable home and business owners in high-risk areas to obtain coverage; these plans pool together several home and business owners whose properties are vulnerable to a similar degree of risk, and insure them against loss.

Fire Insurance Pools are also managed by some insurance companies. These companies pool together properties subject to comparable fire risks, and insure their owners against significant loss. The companies calculate the statistical potential of loss for each individual property using underwriting methods, including physical inspection and a credit report check. Everyone in the pool pays in a little, and whoever has the misfortune of suffering loss of property or belongings in a fire has protection.

Call or contact James E. Moore Insurance Agency, Inc. today about your own business and personal fire coverage, and about protecting your home or business from fire-related financial loss.

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