Fire Insurance Premium Calculation Formula

Fire insurance premium rate depends upon the nature of occupancy i e.

Fire insurance premium calculation formula. These are some of the most important factors that play a role in determining the premium to be paid for any fire insurance policy. In this case 250. Thus the total insurance expense to be paid is 19 300 for the sum insured of 500 000. For rating of area 3 and class b fire insurance rates per 100 of coverage for buildings is 0 61 and that for contents is 0 65.

Calculate the total fire insurance premium by substituting the values of 90 000 and 0 61 in the insured value and the rate respectively in the formula. However factors such as the legal liabilities of the owners manufacturing costs the kind of organization and the location among others also play a role in premium calculation. You pay insurance premiums for policies that cover your health car home life and others. Hence the premium for buildings is.

Calculate the premium for buildings. Calculate the premium for buildings. How close you are to a fire station is another indicator used to adjust premiums. Fire is a major concern so it s an advantage to live near a hydrant or station.

Claim loss suffered x insured value total cost. Both the insurer and the insured then bear the loss in proportion to the covered and uncovered sum. The cost of a fire insurance policy is ascertained on the basis of various parameters. For what purpose the building is been used.

The actual amount of claim is determined by the formula. Calculate the total fire insurance premium by substituting the values of 90 000 and 0 61 in the insured value and the rate respectively in the formula for rating of area 3 and class b fire insurance rates per 100 of coverage for buildings is 0 61 and that for contents is 0 65. The object of such an average clause is to limit the liability of the insurance company. Total premium to be paid will be.

The closer you are the better the chances of saving your property in the event of fire.