The definition of fire in the insurance sense:
The fire is every apparent ignition accompanied by flame and heat, and it arises involuntarily on the part of the owner of the danger, and results in a financial loss.
From this definition we find that there are some conditions that must be met in the fire in order for it to be considered a fire in the insurance sense, namely:
1. That there be an actual and apparent ignition of any visible eye.
2. The ignition results in flame and heat. Financial losses resulting from exposure of objects to fire with the intention of heating or drying are not considered fire in the insurance sense, and also, self-ignition that does not result in flame or heat is not considered a fire in the insurance sense.
3. The object subject to insurance should not be in the event of combustion such as coal in the event that it is used as a driving force or in heating where it is in a state of ignition and is not considered a fire in the insurance sense, but in the case of storage and was not used, its ignition is considered a fire in the insurance sense.
4. The accident is required to be involuntary, i.e. unintentional, by the person of the risk or one of his subordinates, since the insurance company does not ask for losses resulting from intentional fire accidents, whether by the insured or one of his subordinates, but it is obligated to compensate the insured for the losses resulting from Fires that are deliberately ignited by others in the property of the insured and without his knowledge.
5. That the fire result in a financial loss, and if the object of insurance is not affected by the fire, or if its value increases after the fire, as in the case of igniting a pottery factory, which leads to assistance in the process of making pottery tools, it turns into materials of greater value. In this case, there is no fire in the insurance sense.
From the previous definition of fire in the insurance sense, fire can be divided into two types:
1. Friendly fire:
It is a fire that is used regularly and within the limits set for it and individuals ignite it themselves. Examples include: Tar used in homes for cooking and heating or those used in some factories to complete some industrial operations, it leads to an increase in the value of the assets and therefore is not considered a fire in the insurance sense.
2. The enemy fire:
It is a fire that the insured does not intend to ignite or deliberately ignite, but it goes out of the space allocated to it, which leads to losses that cause the object of insurance, and it is considered a fire in the insurance sense.
It may start with a friendly fire and then turn into the enemy fire, as in the case of igniting the gas stove in the houses for the purpose of cooking, then the fire goes out of the space depicted for it which is the stove of the gas cooker to some other assets in the house such as curtains on the windows and losses occur, and by the way we get the friendly fire has turned into an enemy fire In this case, the fire is considered a fire in the insurance sense.
The opposite is true. The enemy fire may turn into a friendly fire, as in the event of a fire in a pottery factory. This fire leads to the completion of the manufacturing processes for some pottery tools. As a result of this fire, the value of the assets increases. In this case, the fire is not a fire in the insurance sense.
The financial losses resulting from the fire accident can be divided into two main parts: direct losses and indirect losses.