Tennessee Family Home Burns While Firefighters Watch

15 Dec
fire - onlookers

“A Tennessee couple helplessly watched their home burn to the ground, along with all of their possessions, because they did not pay a $75.00 annual fee to the local fire department.”

Vicky Bell called 911 when her home in Obion County caught fire.  Firefighters arrived on the scene but as the fire raged, they simply stood by and did nothing. South Fulton Mayor David Crocker defended the fire department, saying that if firefighters responded to non-subscribers, no one would have an incentive to pay the fee. Residents in the city of South Fulton receive the service automatically, but it is not extended to those living in the greater county-wide area.”

What is even more interesting about this claim is that, the South Fulton Fire Department made national news last year after they refused to put out a house fire due to an unpaid fire subscription fee in the same county.  In that case the homeowner had forgotten to pay his subscription.

The city’s mayor told the news station that the fire department can’t survive without the fees and if they make exceptions to the rule, homeowners would not pay the fee. “There’s no way to go to every fire and keep up the manpower, the equipment, and just the funding for the fire department,” Mayor David Crocker said, adding that after last year’s fire, everyone should be aware of the city’s policy. I know what you are thinking, and I certainly had the same thought—“ I can not believe that the fire department just stood there and let the home burn”.  But it is true and has been for some time.

There is a policy is on file for each of the counties relating the requirement and cost to pay for the fire department to respond to a fire. .  In researching another case, in Yuma, Arizona I referenced the site  which provides specific information as to the areas that are subject to a fire subscription charge and what that charge is annually.  Residents in these unincorporated areas should be well aware of the requirement to pay for the subscription at the point they buy their property and are billed annually for the fee.

Until the reality of a loss like this occurs we never seriously question what it means when a dwelling or structure is located outside of the city limits—in counties that have to pay for fire subscriptions.  This term sometimes is referred to as “Pay for Spray” or even “Pray for Spray”.

Now we turn to the question of whether the couple’s insurance policy would pay– assuming they had carried the coverage.  On many occasions I have heard the argument from homeowners who are required to pay a fire department fee that they were not going to pay the fire subscription because they have insurance which will pay for the loss.  Sometimes it is an oversight, as in the example cited above, but sometimes the homeowner is willingly not paying the fee.

Now to the question of “covered not covered” on insurance. Some of you might be immediately thinking about the “fire department service charge” that is included in many policies for a sub-limit of maybe $500, $1,000 or $2,500. Here is what that paragraph says in the 5/11 edition date of the ISO Homeowners form HO 0003.

4. Fire Department Service Charge

We will pay up to $500 for your liability assumed by contract or agreement for fire department charges incurred when the fire department is called to save or protect covered property from a Peril Insured Against. We do not cover fire department service charges if the property is located within the limits of the city, municipality or protection district furnishing the fire department response.

This coverage is additional insurance. No deductible applies to this coverage.

This paragraph will respond for a loss wherein the insured has agreed to pay a fee for the fire department to put out a fire.  Clearly this would not pay their fee required for the fire department to respond in the first place ($75.00 or whatever was being charged) but rather pay a portion of a fee that the insured has contracted for in advance for a department to put out a fire.  In the case at hand this would not appear to have applied.

I posed this question to several insurance companies interjecting my thought that I did not think that the policies should pay—be it a Dwelling Form; Mobile Homeowners; or Homeowners.  After all the insured “willfully” chose not to purchase the protection or “negligently” forgot to pay the annual fee.  Without exception the insurance companies disagreed with me.  The first response from the insurance companies was a bit of surprise and as I was on the phone with one of them he was goggling this issue and  struck by how many cases of this type of loss had occurred over the last couple of years.  The common answer from all the companies was:

1. There is no exclusion for this in the form.
2. There is nothing in the form that requires them to pay the fee and if they don’t the policy would not apply.
3. This is an underwriting issue.  We do not have that question on our application.  We accepted the risk therefore we are on the claim.
4. We should have asked that question, but there are so few of these situations that it would just add one more burden to our underwriting process.

So there you have it.  Somehow I think these are all interesting answers for the small claims but when this becomes the million dollar question of that beautiful home perched up on an isolated mountain top I think the companies may look differently about that answer.


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