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