Canadian insurers urged to help stop municipal cuts from negatively affecting fire services

Municipalities across Canada are cutting budgets for fire services to levels that insurers would consider “dangerous,” and insurers should consider using their premium clout to help put a brake on the cuts, insurance representatives heard at a Fire Underwriters Survey (FUS) meeting in Toronto.
“You have so much influence on the fire services, it’s incredible,” said Jim MacLeod, vice president of FUS and municipal consulting at Risk Management Services (RMS), an SCM Company. “You just don’t realize it.
“There is no legal reason to have a fire hall and/or a fire dept in a municipality. They are there primarily because cheaper insurance rates are offered by you to the citizens of that community. And they [the fire services] are under attack right now.”
After the meeting, MacLeod said funding cuts are ubiquitous in Canada. He also noted that volunteer firefighting crews are understaffed due to the cuts, making it more difficult to respond to alarms in remote communities.
MacLeod noted that when fire services decline, FUS responds by downgrading the service levels. This does not happen without a great deal of consultation with civic authorities.
Insurance industry representatives should engage in this process by making it clear to municipal representatives that declining FUS grades for fire services would have negative insurance implications – including higher premiums in areas with weak fire services, or even a withdrawal of insurance coverage.
The FUS presented survey results from New Zealand showing that quicker fire service response times within the first four to eight minutes of a fire can reduce an insurer’s claims costs by about $3,000 per minute.