City could recover $230K a year from fire-related insurance coverage

Insurance companies have been selling the extra coverage for years, although municipalities haven't been collecting. Coverage typically ranges between $500-$25,000 for each policy. It covers such things as volunteer firefighters, “fire extinguishing materials, dry sprinkler powder aerosol units, refilling self-contained breather apparatus, and the truck time,” the company says.

“It depends on what coverage the homeowner has purchased,” Woods told members of the community services committee this week. “These are the items that are extra.”

Even with the company taking 30 per cent of what they find, Fire Marque estimates the city can expect as much as $232,000 a year in new revenue.

The company does all the associated work, and the city isn't charged anything beyond the 30 per cent. In all, 33 municipalities have signed on, as well as cities in other provinces. Any money recovered must be spent on firefighting services.

Woods learned about the little-known coverage in many home insurance policies while working on hurricane, flood and fire claims in the U.S. He founded Fire Marque in 2011.

While liking the idea, Ward 12 Coun. Joscelyne Landry-Altmann wondered if it might sound too good to be true.

“There's always a downside to these sorts of things,” Landry-Altmann said. “Are there any downsides?”

Chris Carrier, the company's national municipal accounts manager, said they have carefully designed their process – known as as "Indemnification Technology" -- to ensure it doesn't cause premiums to go up – for homeowners or the city.

“We did not want to hurt the homeowner in the funds they receive, or their future premiums,” Carrier said. “And we've done that.”

Ward 11 Coun. Terry Kett said the city should move quickly.

“Every month we sit and ponder this, that's $20,000 that our taxpayers are not receiving,” Kett said. “Municipalities across Ontario have been missing revenue – any way we can get a bit of money here is great.”

The committee directed Tim Beadman, the chief of fire and paramedic services, to prepare a report to move ahead with the plan by September.