We can infer that insurance companies…..

Fire insurance is insurance against loss from fire, lightning and similar dangers. Generally, fire insurers agree to pay the cost of replacing lost property. minus any drop in value due to age. Separate agreements may be drawn up to cover other losses, such as the loss of rent to a landlord. The costs of fire insurance depend on the likelihood of loss. In determining premiums a number of factors are considered, such as the location of the building, the materials of which it is made, and the type of business.