David's house suffers $5,000 of water damage due to the fire department fighting a fire at his house. David may recover for this loss under his fire insurance policy.

Question

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A fire insurance policy, whether oral or in writing, is a contract in which the fire insurance company promises to pay the insured if some real or personal property is damaged or destroyed by fire. A fire insurance policy is effective on delivery to the insured, even before the premium is paid.

David's House Suffers $5,000 of Water Damage Due to the Fire