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Difference between Fire Insurance and Marine Insurance

Insurance is a contractual agreement between the insurer (the insurance company) and the insured. The insurer provides benefits like financial protection or reimbursement against losses to the insured and the insured has to pay a premium at regular intervals. Fire insurance and marine insurance are the two types of insurances that provide different benefits to the insured. Let us see how fire insurance differs from marine insurance!

Fire Insurance:

Fire Insurance is a type of insurance in which the insurer (the insurance company) is supposed to pay the insured a specific sum of money for the damage and losses caused by fire. The insured agrees to pay a fixed amount as premium at regular intervals of time. It generally contains certain exclusions such as war, nuclear risks etc.

The loss covered by fire insurance generally includes loss of use, additional living expenses due to rundown conditions, damage to the personal property etc. One may document the property and its contents to simply the assessment of damage. The insured can't claim the amount more than the value of property damaged or the cover provided by the policy, whichever is less. The duration of the policy is generally one year; however, one can renew it every year before it expires.

Marine Insurance:

As the name suggests, the marine insurance is a type of insurance in which the damage to the ships, boats and the goods carried by them is covered. The insurance company pays the amount specified in the policy for the damage to the ships and goods carried by the ships and the insured or ship owner is supposed to pay a fixed as a premium at regular intervals. Marine insurance is very necessary for the ship-owners as through this policy they can claim the damages in case of a mishap. There are different types of marine insurance such as:

1) Hull insurance: It covers the damage to the torso and hull of the vessel including the damage to furniture and similar articles present on the ship.

2) Cargo insurance: It covers the cargo on the ship including the objects owned by the voyagers of the ship.

3) Marine Liability Insurance: It covers the liability arising due to a ship crashing or colliding. For example, one ship may collide with another ship and damage another ship and its goods. In this case, the damage to another ship caused by the ship of the policyholder is covered in the policy.

Based on the above information, some of the key differences between fire insurance and marine insurance are as follows:

Fire Insurance Marine Insurance
In this type insurance, the insurance company covers the damage to the property or assets caused by the fire. In this type of insurance, the damage to the ships and the cargo is covered by the insurance company.
Its objective is to cover the fire risk. Its objective is to cover the sea perils.
Policy amount is not more than the value of the property. Policy amount may be equal to the market value of the cargo or ship.
The moral responsibility of the insured is an important condition. It does not have any clause related to the moral responsibility of ship or cargo owner.
It does not offer any margin of the expected profits. The insured is allowed a margin of the expected profits, around 10-15% of the insured amount.
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