Page 71 - Fire Insurance Ebook IC 57

The Insurance Times

to frequent fluctuations. These fluctuating stock
poses a strange problem. The sum insured under the
standard fire policy then needs to be constantly
increased or decreased by endorsement with
consequent adjustment of premium, extra or refund,
as the case may be.

This would result in extra administrative work for both
the insured and the insurer. So, the declaration policy is
issued, which is basically a Fire policy with a declaration
clause attached to it.

The insured fix a provisional sum insured which
represents the highest value of stocks at any point of
time during the policy period. The premium paid too
is provisional, and is subject to adjustment at the expiry
of the policy.

The Tariff Rules for Declaration policies are
(a) The minimum sum insured shall be Rs.1 crore.
(b) Reduction of sum insured not allowed.
(c) Monthly declarations based on the average of the

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