1. Insurable Interest : In fire insurance the assured must have insurable interest in the subject matter of the insurance. Without insurable interest the contract of insurance is void. In case of fire insurance, there must be present both at the time of insurance and at the time of loss.

(i) Ownership,

(ii) Possession, and

(iii) Contract.

2. Utmost Good Faith : The contract 0f hi insurance is a contract of utmost good faith. The insured should be truthful and honest in giving information to the insurance company. Insured knows everything about the subject matter of the insurance. He is under a duty to disclose accurately all factual information known to him. The insurance company should also disclose the facts of the policy to the proposer. So utmost good faith on the part of both the parties is a must.

3. Indemnity: The contract of fire insurance is a contract of strict indemnity. The assured can, in the event of loss, recover the actual amount of loss from the insurer. This is subject to the maximum amount for which the subject matter is insured.