B.C. district seeks cost recovery from insurance companies when called out to house fires

The board of the Regional District of Okanagan-Similkameen (RDOS) appears ready to join numerous municipalities across B.C. in pursuing “cost recovery fees” from insurance companies when fire departments are called out to structure fires.

“I’m very happy that this is coming to the board right now,” said RDOS Chief Administrative Officer Jim Zaffino during a brief presentation at last Thursday’s regular meeting.

The proposed bylaw would allow the regional district to recover fire response costs from insurance policies that include such coverage. It applies to house fires only and excludes outdoor fires or wildfires.

“This would allow the RDOS to collect funds from insurance policies that cover the cost of fire response,” said Zaffino. The bylaw received its first three readings at the meeting.

It also includes a recommendation to hire a Vancouver-based firm to handle the claims process. The company would receive 30 percent of the recovered funds as payment for its services.

“The cost recovery would be filed against the insurance companies of homeowners or tenants where a fire takes place,” Zaffino explained. “Other areas in Canada have implemented this successfully. There are real expenses when responding to fires, and more fires increase the risk of fire departments going over budget. This system allows us to recover costs—not from the homeowner, but from their insurance company.”

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Mayor welcomes proposal

Princeton Mayor and RDOS board member Spencer Coyne welcomed the proposal, saying he’s been advocating for such a system in his community for four years.

Director Matt Taylor also supported the motion, noting, “It certainly makes sense to me.” However, he asked what happens when a homeowner isn’t insured.

“If there’s no insurance, there’s no claim,” Zaffino responded.

He emphasized that residents are already paying for fire departments through property taxes and suggested the province should do more to ensure that insurance companies return fire response funds directly to municipalities.

Zaffino noted that during his time in senior management in West Kelowna, he raised this issue repeatedly at Union of British Columbia Municipalities (UBCM) conferences, but without success.

“Having the province tell insurance companies that the money they collect on behalf of fire departments should go back to fire departments—not for road repair or other uses—is the goal,” he said. “This is just a start. I would love to see this become province-wide.”

‘Substantial amount of money’

He added that while municipalities with large property bases would benefit most, the RDOS, with approximately 20,000 residents and around 10,000 properties, could still recover a substantial amount of money.

“If I get the board’s permission, I would like to bring this back to UBCM with the support of other municipalities to push for provincial approval,” said Zaffino.

He explained that the amount recovered would be based on a formula developed by insurance companies and the adjuster hired by the RDOS. He expressed confidence that a strong proposal could win provincial support.

However, not all directors were fully on board.

Director Richard Barkwill from Summerland questioned the use of a private company that would take 30 percent of recovered funds.

“Why doesn’t the district just send a bill to the homeowner and the homeowner passes that bill onto the insurance company, just like many others,” Director Richard Barkwill said, “When there’s a fire, there’s a lot of bills and you deal with them.”