A Personal Finance Blog for Malaysian: Fire Insurance Clauses

Wednesday, January 28, 2015

Fire Insurance Clauses

Based on the Malaysian Revised Fire Tariff (RFT), there are easily 40 clauses available for use in the Fire Insurance Policy.

Technically, there are 3 categories of Clauses.

1st Category (Premium is charged on inception)

  • Escalation Clause (to cater to the subsequent appreciation in value of the subject matter)
  • Public Authority Clause (by topping up the SI to cater to the requiremnent of new building by-laws etc)
  • Removal of Debris Clause (by topping up the SI to cater to the cost of removing the debris or insured as a separate item)
  • Architect , Surveyor & Consultant Fees (by topping up the SI to cater to all professional fees incurred or insured as a separate item)
  • Reinstatement Value Clause (by topping up the SI to cater to further increase in the reconstruction cost)
  • Contract Price Clause (by topping up the SI to cater to the profit margin for goods manufactured but not delivered)
  • Outbuildings Clause (by topping up the SI to cater to ancilliaries like fences, gates, guard post etc)


2nd Category (Premium is charged /refundable upon declaration)

  • Capital Addition Clause with minimum SI RM 1.5Mil (declaration to be made within 3 months)
  • Stock Declaration Clause (monthly declaration)
  • Reinstatement Value-Day One (declaration at the end of 12 months)
  • Internal Removal Clause (retospective from the date of removal or oversight)


3rd Category (Free of Charge)

  • Other Contents Clause (Limit RM1,000)
  • Designation Clause
  • Appraisement Clause (5% of SI or RM5,000 the lower of)
  • Temporary Removal Clause
  • Temporary Storage Clause (Limit RM500,000 up to 60 days)
  • Alteration & Repair Clause
  • Mortgagee Clause / Automatic Renewal Clause
  • Hire Purchase Clause
  • Computer Systems Records Clause
  • Vehicle Load Clause