Fire Department Service Clause

Definition - What does Fire Department Service Clause mean?

A fire department service clause is a provision in a fire insurance policy, which stipulates that the insurance firm will reimburse the client the cost incurred in procuring the services of a fire department. These services must wholly relate to fire on the insured property, and claim payments are only made after expenses have been incurred.

Insuranceopedia explains Fire Department Service Clause

A standard fire policy covers fire that occurs due to the listed causes, with extreme cases requiring additional premiums. To profit, the insurance company has a need to take necessary precautions to ensure losses that arises are as minimal as possible. This is the reason behind the introduction of the fire department service clause.

This clause is necessary in the following cases: in remote areas and for high value property. First, in a majority, if not all, of remote areas, there are no fire departments close by and therefore, in a case of a fire on the insured property, one has to call a fire department from a larger municipality. Second, insured property of significantly high value necessitates the services of a fire department to reduce losses. Therefore, insurance firms, in a bid to encourage the insured to act rationally in a case of a fire, introduced the fire department service clause.

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