IRDAI Surveyor Fire (S-02) flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Indemnity principle

The insured is restored to the pre-loss financial position, no better and no worse; the sum insured caps payment but does not determine the amount of loss.

Insurable interest

A legal or financial relationship with the property such that the insured benefits from its preservation and suffers loss from its damage; must exist at the time of loss.

Proximate cause

The dominant, efficient cause of loss without which the loss would not have occurred; determines whether the peril is covered under the policy.

Utmost good faith

Both parties must disclose all material facts relevant to the risk; breach by the insured can render the policy voidable under the Indian Contract Act, 1872.

Average clause

Underinsurance penalty: claim = (sum insured / value at risk) x loss, applied when the sum insured is less than the value of the property covered.

Subrogation

After paying an indemnity, the insurer acquires the insured's rights to recover the loss from a negligent third party responsible for the damage.

Contribution

When multiple policies cover the same property and interest, each insurer pays a rateable share so the insured cannot recover more than the actual loss.

Reinstatement value basis

Settlement based on the cost of replacing or rebuilding with new property of like kind and quality, without deducting depreciation, subject to the sum insured.

SFSP policy

Standard Fire and Special Perils policy, the base Indian fire cover, including fire, lightning, explosion, riot, storm, flood, subsidence, and sprinkler leakage.

Fire peril ignition requirement

Cover requires actual ignition; scorching without ignition, or smoke damage from a non-covered source, is generally excluded from the fire peril.

12% condition

If the sum insured on an item is below its value, the insured bears a rateable proportion of every claim; the average clause applies item by item.

5% declaration condition

On declaration policies, monthly stock declarations are required; claims are settled on the higher of the average declaration or actual value.

Standard exclusions

War and nuclear risks, willful acts or gross negligence, spontaneous combustion, fermentation, and theft (unless separately covered) are excluded from SFSP.

Removal of debris cover

An extension covering costs of clearing debris after a covered loss, usually subject to a sub-limit expressed as a percentage of the claim.

Reinstatement intention condition

The insured must notify intention to reinstate within the period specified in the policy; otherwise the claim reverts to market value settlement.

Terrorism extension

Terrorism is not a standard SFSP peril; it must be expressly endorsed and separately rated to be covered under the policy.

Value at risk

The actual value of the insured property on the date of loss, used to test for underinsurance and to apply the average clause.

Stock loss computation

Loss = opening stock + purchases - sales - closing stock salvaged, cross-checked against books of account and stock statements.

Depreciation in loss assessment

Reduction applied to damaged assets based on age, condition, and useful life when settling on market value basis rather than reinstatement basis.

Salvage deduction

The realisable value of damaged property is deducted from the gross loss before applying average; salvage generally belongs to the insurer.

Repair versus replacement

For partial losses, repair cost is usually the correct measure if the asset remains functional; replacement applies when repair is uneconomic or impossible.

Policy excess deduction

The deductible or excess stated in the policy schedule is deducted from the assessed loss before payment, in addition to any average application.

Surveyor licence validity

A surveyor must hold a valid IRDAI licence for the class of business (fire) before conducting a survey; practising without one is an offence.

Initial site inspection

First visit records date and time of loss, cause, extent of damage, and secures the scene; dated photographs and videos are taken as evidence.

Key claim documents

Policy copy, claim form, FIR or incident report, fire brigade report, stock statements, purchase invoices, books of account, and repair estimates.

Preliminary survey report

An early report to the insurer summarising cause, extent, and preliminary loss estimate, submitted within the timeframe agreed with the insurer.

Final survey report contents

States proximate cause, coverage status, basis of assessment, valuation, exclusions affecting liability, and recommendations, with supporting evidence attached.

Salvage chain of custody

Record of salvaged property from collection to valuation and disposal, with the insured's acknowledgement, to prevent disputes over salvage value.

Surveyors Regulations 2015

IRDAI (Insurance Surveyors and Loss Assessors) Regulations, 2015 govern licensing, renewal, fees, records, and conduct of surveyors and loss assessors in India.

Independence and impartiality

Surveyors must have no direct or indirect interest in the subject matter and must not accept remuneration contingent on the claim amount assessed.

Confidentiality obligation

Information obtained during a survey must be kept confidential and used only for the purpose of the survey and report to the insurer.

Record retention

Surveyors must maintain records of surveys conducted and produce them to IRDAI on request; failure can lead to suspension or cancellation of licence.