Question

Discuss the importance of fire insurance.

Answer 1

The purpose of fire insurance is to provide protection against the risk of loss by fire. The insured person is placed in the same financial position as he/she was before the loss by fire happened. Fire can cause huge damage to a person's house. In the case of business, the entire factory, office or godown may be destroyed by fire. The businessman may lose his source of livelihood and may become bankrupt. Fire insurance helps him restart his business with the help of money he receives from the insurance company.