All About Fire Insurance in Indonesia **

Fire insurance business is governed by the authorized  bureau, in Indonesia the insurance bureau under  Finance Ministry, that lays down the terms of coverage, the premium rates and the conditions of the Fire Policy. The fire insurance policy has been renamed as standard fire insurance called PSAKI (Indonesia Standard Fire Insurance Policy) and Special Perils Policy. The risks covered are as follows :

• Dwellings, Offices, Shops, Hospitals (Located outside the compounds of industrial/manufacturing risks)
• Industrial / Manufacturing Risks
• Utilities located outside industrial/manufacturing risks
• Machinery and Accessories
• Storage Risks outside the compound of industrial risks
• Tank farms / Gas holders located outside the compound of industrial risks

Fire Insurance Risks guaranteed, there are 2 major parts namely  :

1.   Standard Fire Insurance Policy in force in Indonesia (PSAKI) 
2.   Additional Risks Warranty

Standard Fire Insurance

Warranty replacement of losses in the standard fire insurance covering risks caused by  :

-    Fire caused by the fire itself, errors waiter, neighbor, robber, or other causes.

-    Lightning    :  Damages of property due to Lightning insured.

-    Explosion    :  All kinds of explosions that caused fire, and out of 
                           the exceptions or explosion caused by nuclear power.

-    Aircraft Fall :  Damage and / or losses on insured property due to the Fall of 
                           Aircraft or objects falling from Aircraft.

-    Smoke        :  The smoke that comes from property and or insured interests 
                           under the policy or other policies that run series with this policy 
                           for the same participants.

Premium Calcultion of Standard Fire Insurance

Here is a case of standard closure without additional perils covered. Suppose a dwelling house with the following details   :

Estimated value of building (minus the price of land)    IDR.   900.000.000 ,- 

The contents of the building (i.e. Furniture, Electronics etc.)    IDR.   100.000.000 ,-+  

Insured Value                                                                 IDR 1.000.000.000 ,-

 

Basic Premium            :   IDR. 1 billion x 0.058% = IDR. 580.000, -
Policy Fee and Stamp :   IDR. 34,000, -

Premium Paid             =   IDR. 614.000, -

Expanded Fire Insurance

You can get additional coverage by way of endorsements. Here is the standard perils covered (Fire, Lightning, Explosion, Aircraft damage and Smoke – in Abbreviation FLEXAS) and the additional coverage possible.

Perils Covered

The following causes of Loss are covered :

Fire Lightning Explosion/Implosion Aircraft damage Smoke Riot, Strike Terrorism

Storm, Flood, inundation Impact damage Malicious damage Subsidence, landslide Bursting or overflowing of tanks Missile Testing Operations Bush fire etc.

Exclusions

The following are excluded from insurance coverage :

• Loss or damage caused by war, civil war and kindered perils
• Loss or damage caused by nuclear activity
• Loss or damage to the stocks in cold storage caused by change in temperature
• Loss or damage due to over-running of electric and/ or electronic machines

Standard Wording Policy of Fire Insurance

Generally, insurance policies are broken down into four areas. One is the insuring agreement. The second are the definitions. The third would be exclusions, and the fourth would be conditions. Every fire policy – almost every fire policy – has four areas of coverage.

The first area would be the dwelling. The second area would be other structures like a detached garage, gazebo, guest house, etc. The third area is personal property – the property that the insured would have in the home when the fire took place. The fourth area would be what they call loss of use or additional living expenses and that coverage helps to pay for the insured to move out and live somewhere else for the period of time it takes to repair the structure before they can move back.

Claims In the event of a fire loss covered under the fire insurance policies, the Insured shall immediately give notice there of to the insurance company. Within 15 days of the occurrence of such loss the Insured should submit a claim in writing giving the details of damages and their estimated values. Details of other insurances on the same property should also be declared.