COVERAGE CONCERNS


FIRE DEPARTMENT SERVICE CHARGES

Homeowners and farmowners policies cover expense
of fire department response in rural areas

By Roy C. McCormick

A fire department service charge is recognized as a proper subject of insurance. Professional firefighters with sophisticated modern equipment are the best guarantee that damage from a hostile fire will be held to a minimum.

32rn3 Holders of homeowners policies who live outside the boundaries of a fire protection district, and farm property owners in rural areas who carry farmowners policies have a valuable asset in the fire department service charge clause included in their property insurance. The provisions of the benefit are spelled out under "additional coverages" or "incidental coverages" in Section I.

Urban residents who support a fire department by taxation have a right to expect that their department will be paid for outlying runs. The use of firefighters and equipment is costly, and the protection of the taxpayers is somewhat diminished by outside response.

A fire department service charge is recognized as a proper subject of insurance. Professional firefighters with sophisticated modern equipment are the best guarantee that damage from a hostile fire will be held to a minimum. It is important to know when payment will and will not be made under a fire department service charge clause. The provisions are clear and with similar effect in ISO and AAIS homeowners and farmowners forms. They can be summarized as follows:

The insurer will pay charges up to $500 (or other specified amount) for response to insured property beyond the limits of a city, municipality or protection district furnishing the fire department response. It is a condition of the coverage that the insured have a contract or agreement with the fire department to pay a service charge when the fire department is called.

It also is a condition that the insurance policy will pay charges only for calls to save or protect property from a covered peril. The insurance would certainly apply to a run necessitated by fire. It also would pay charges, for example, for response to a call following gas explosion. But it would not cover charges made for rescuing a dog that had tumbled down an abandoned well. This is additional insurance and there is no deductible.

Property owners in rural and farm areas who are without fire department facilities that they support by taxation should make certain that they are included by the nearest fire protection district on its list of those who have contracted for service outside the district boundaries. Special records are made of the location of such property so that an emergency call will bring immediate response. Definite arrangements of this kind by contract or other agreement, with assurance of payment to the fire department, remove uncertainties.

Agents should familiarize themselves with local arrangements for making runs to outlying areas. A visit to a central fire headquarters or other responsible office will produce information that may be passed along to property owners. The built-in limit applicable to a service charge generally is adequate; however, distance and other factors could warrant an optional increase in the limit. An insurance counselor's advice can help.

Perhaps the building contractor, real estate developer or local authority has made certain that a particular fire district will service the outlying property. Nevertheless, the property owner or insurance representative should verify that this is the case, and that the location is known to the fire department.

Fire districts generally have reciprocal agreements with neighboring districts. This is important to small-town or rural area firefighters whose equipment is limited. Note that payment under the fire department charge clause would be limited to the department with which the property owner has an agreement. Cooperating officials generally have a reimbursement or other-expense handling arrangement in place.

The modification of the homeowners policy identified as "mobilehome" invariably includes a fire department service charge payment provision, whether written by endorsement of a homeowners policy or as a specialty policy with "nonstandard" provisions. Especially in the latter case, it is advisable to confirm the additional or incidental coverage under review and the amount of insurance.

In summary, an insurance provider can be of special service to an insured whose new residential property is in a rural area. The agent or broker and insured should verify that a specific fire department will respond to a call from the property. Second, the insured whose property is outside the boundaries of the responding fire department district will appreciate being informed that insurance coverage applies to a charge for a response involving property damage from a covered peril.

This is another example of the "hidden extras" in residential package policies that heighten their value. It pays to know the extra benefits found under additional/incidental coverages in Section I. They are significant expansions of the invaluable basic protection.

The author

Roy C. McCormick is consulting editor of the Policy, Form & Manual Analysis Service (PF&M) published by Rough Notes.