A contract of fire, insurance is a contract whereby the insurer undertakes, in consideration of the premium paid, to make good any loss or damage caused by fire during a specific period. The contract specified the maximum amount which the assured can claim in case of loss. This amount is fixed by the parties at the time of the contract. It is, however, not the measure of the loss. The loss can be ascertained only after the fire has occurred. The insurer is liable to make good the actual amount of loss nor exceeding the maximum amount fixed by the parties.
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