Fire insurance is an agreement between an insurance company and an insured person. As per the terms of this according the insurance company pays a specific sum of money to the insured person when he faces some losses due to fire. This amount is paid by the insurance company for a specific period of time.

Fire insurance provides for all types of losses incurred because of a fire is caused due to different reasons. This includes fire caused by accidents, because of faulty wiring, arson and a natural calamity or may be because of any other reason which is listed in the agreement. The policy holder does not get any benefits if the fire has been caused because of any reason that has not been mentioned in the insurance agreement.

In general, fire insurance plans provide for all losses incurred when the physical property gets damaged. Different types of benefits may be offered. A very few types of insurance plans may even cover losses incurred on personal belongings, loss of life or pets, medical bills for an injury etc.

Several types of insurance policies are available under this type of insurance. Under a specific policy, the insurance company pays an amount which is less than the actual value of the property that has been destroyed in the fire to the policy holder.

Comprehensive fire insurance policy can cover all types of losses incurred because of fire, burglary and theft. Many times, a business faces losses when it remains shut for a specific time period after the fire. The losses so incurred are provided for by a comprehensive insurance plan.

A valued policy can be defines as the insurance policy where the amount that the insurance company pays to the policy holder is fixed. This fixed amount is decided by the insurance company and depends on the insurance company. The insurance company does not take into account the actual value of the property which has been damaged in fire.

A floating fire insurance plan will provide for losses at two different properties under the same insurance plan and the same rate of premium. This means that a policy holder can enjoy benefits at two different locations with the help of just one plan. This can include apartment insurance.

Replacement plan is the one wherein the insurance company reinstates the property that has been damaged in a fire. The policy holder does not get any cash benefits in this case.