Difference between Fire Insurance and Marine Insurance

Fire and marine insurance contracts are similar in most of the cases because both these contracts are indemnity contracts. But, the following differences are observed in both the contracts.

(i) Moral Hazard :

In marine insurances, the chances of moral hazard do not exist so much as are in the fire insurance.

(ii) Insurable Interest :

The insurable interest must exist both the time, at the inception and at the completion of the contract. This is the reason fire insurance policies cannot be freely assignable. The insurable interest in marine insurance must exist at the time of loss. So, the marine policies are freely assignable.

(iii) Profit :

Marine policies generally allow certain margin of profit to be charged at the time of indemnification of loss, but the fire policies do not allow it ordinarily.

(iv) Valued Policies :

Marine insurance policies are generally valued policies and the market fluctuation is avoided; but the fire polices strictly adhere to the doctrine of indemnity and only the market value of the property at the time of loss (valuable amount) is compensated.