A recent article by the Canadian Underwriter is urging rural Albertans to take a careful look at their fire insurance policies to avoid what could become an unhappy and expensive surprise bill.
Many rural residents do not realize that in some rural communities it is up to the property owner to cover the cost of a fire department responding to a call. In the past, these costs were often covered through municipal taxes. However, more and more often, municipalities are now choosing to charge the person who received the bill.
The reason is relatively simple. Many rural municipalities do not collect enough in property taxes to fully fund fire services across large geographic areas. By billing landowners directly for emergency responses, municipalities can ensure fire departments are properly resourced without raising the overall tax burden for everyone.
A recent story in the Rural Alberta Report tells of a Lacombe County resident who received a $6,700 bill after a fire. That is on the low end, as it’s more than possible the bill could have reached $20,000 or more for a hard-to-put-out fire.
Most Albertans have the home insurance and/or farm insurance necessary to cover the physical damage caused by a fire, but may have limited or no coverage for the costs billed by the fire department. Those charges can quickly climb into the tens of thousands of dollars, depending on the complexity and duration of the response.
Firefighter responsibilities
When firefighters are sent to a scene, they are required to remain until the situation is fully under control. It can take days to extinguish incidents such as underground or smouldering fires, which are not uncommon on rural properties. This is why firefighting bills can often climb into the tens of thousands of dollars and also why municipalities are less and less willing to take on the risk themselves.
Understanding the distinction
It is vital for farm and rural property owners to thoroughly understand the distinction between fire property insurance, fire department charges and firefighting expense coverage within a farm insurance policy.
Farm fire insurance is the portion of a farm or property policy that provides financial protection for physical loss or damage caused by fire. It will cover your home, barns, equipment sheds, livestock facilities, and stored feed, etc. When you file a claim, the policy will cover repair or replacement costs, subject to the policy’s terms, conditions, deductibles and limits.
In turn, fire department charges refer to fees billed by a municipality or local fire authority for attending the scene of a fire. In rural areas where fire protection is not fully funded through property taxes, residents may receive a bill for emergency response services, including the trucks, personnel, and other equipment. These charges are separate from the damage to the property itself.
Many farm fire insurance policies include a specific sub-limit for fire department charges, but that limit varies and may not always be enough for large or complex farm operations. However, most farm insurers provide the option to increase the limit for fire department charges if necessary.
This is when working with certified insurance brokers such as us at Lane’s Insurance is a benefit. We are able to help you proactively review your coverage to help ensure you are protected against damage caused by the fire itself, plus the additional expenses that may arise when emergency services must respond.
Fire permit changes
Another reminder is that fire permit season began on March 1. Counties require fire permits for all controlled burns, and unauthorized burning can lead to huge fines and fire department response charges. In addition to obtaining the appropriate permits, rural residents should also pay attention to any local fire advisories, fire restrictions, and fire bans. Never leave any fire unattended, use extreme caution, and follow all permit conditions.
Brokers can save you additional stress and costs
Insurance brokers have access to exclusive rates and coverage options not available to the general public due to our long-standing relationships with our providers and our ability to bring them the very best clients for their policies. In addition, we also know how to get you discounts you probably didn’t even know you qualified for. We know the right questions to ask to ensure you are thoroughly covered at the best rate possible, and are here for exceptional claims support.
We are a leading Alberta-based, family-owned brokerage that is pleased to serve homeowners and business owners throughout the province. Contact us at:
