Short notes on the Functions of Fire Insurance
It is a well known fact that the fire causes huge losses every year. The individual owner by taking fire insurance can prevent the fire waste to some extent.
The insurer acts as a middle man between all the members of the society who are exposed to the fire risk on the one hand and the members who will be the actual victims of the fire losses on the other.
The insurer charges the premium from all the insured members and makes good the losses when they occur to any of them.
The system of fire insurance cannot save the society from the economic loss to the community to the extent of the property lost by fire, but it compensates someone and this saves him from a ruinous loss, at the cost of group of some others.