Like many municipalities across Ontario, Springwater Township is always looking for ways to reduce the financial burden on its taxpayers.
To that end, Springwater Council passed a resolution earlier this year, directing staff to prepare a report to council on the services of Fire Marque, a private Canadian company which could provide additional revenue for the Springwater Fire and Emergency Services Department by invoicing insurance companies for services provided by the department.
In the staff report for information presented to council on Aug.2, Jeff Kirk, director of fire and emergency services for Springwater, provided background on Fire Marque which utilizes ‘indemnification technology.’
Using incident reporting, data collection and property insurance policy wording interpretation, Fire Marque tries to maximize billing opportunities on behalf of the fire department by invoicing insurance companies for costs of the fire department attending a fire.
Indemnification Technology requires a bylaw be in place. The bylaw provides the legal contractual agreement for the requirement to pay
Most insurance companies state that a contract or formal agreement is required prior to the loss, while others say the insured must be legally responsible or required to pay.
“Springwater Fire & Emergency Services see little drawbacks to this program,” Kirk wrote. “By engaging the services of Fire Marque, this would assist in increasing revenues for the department that would assist in offsetting current operational costs.”
Kirk’s position is supported by Colleen Healey, chief administrative officer for Essa Township. Healey said Essa has been working with Fire Marque since 2010 and everything is going well.
“We have an excellent, long-standing relationship with Fire Marque and because of the benefit to the municipality and its residents, I would highly recommend their services to other municipalities,” she said.
“Providing fire fighting service comes at a cost to the municipality and the money recouped following a claim, which insurance providers would hope to keep, is put back to our fire department and training materials and opportunities.”
Rob de Pruis, national director, consumer and industry relations for the Insurance Bureau of Canada, cautions municipalities.
“The Insurance Bureau of Canada does not support the use of third-party collection agencies (Fire Marque) to recoup fire department expenses from residents and insurers following a property claim.” de Pruis said. “Third-party collection agencies aim to maximize the cost recovery amount for fire-related services following a property claim from insured property owners only, which is not fair and equitable.”
De Pruis said fire department expenses add to the cost of insurance claims which add pressure to insurance premiums and this could lead to higher premiums for consumers, and less choice and less competition in the insurance market.
De Pruis also noted that fire department services are municipal services funded through municipal taxation. Every property insurance policy also includes an insurance premium tax which some municipalities may collect to support the cost of administering fire services.
“Insurance Bureau of Canada believes that the insurance premium tax offers appropriate support for municipalities seeking additional revenue sources for their communities,” de Pruis said. “An additional charge for fire services creates a system of double taxation, as residents have already paid for these services through the insurance premium tax and their municipal taxes.”
Currently, Fire Marque works with about one-third of Ontario’s municipalities, including the local municipalities of Essa, Tiny and Tay townships and the towns of Midland, Collingwood and Wasaga Beach.
Springwater Township is seeking input on the proposal before making a final decision.
