Funding Fire Departments

As we drove through heavy smoke that seemed to be blowing north from the fire in Draper last night, our girls started asking about firefighters and how we (as a society) support them. It got me thinking about firefighters as a service of government. Although they are every bit as legitimate and important a service as police, I rarely think about the Fire Department in relation to government.

Since my brain was chewing on the subject it apparently decided to throw me a what-if to consider. I wanted to share here to see what others thought.

Virtually every structure is insuread against fire – this means that insurance companies are highly interested in the work of firefighters. Would it make sense to privatize the fire department by having insurance companies be in charge of funding them? If so, what kinds of changes in service would you expect to see?

I’m not trying to suggest that our fire departments need to be privatized or that they should be. I just wanted to get some feedback on that random idea.

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About David

David is the father of 8 extremely organized children (4 girls / 4 boys) who is constantly seeking answers to tough questions related to parenting, education and politics while moonlighting for 40 hours each week as a technology professional. He also enjoys cooking, gardening, and sports.
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16 Responses to Funding Fire Departments

  1. Interesting idea. Just like any debate about public/private funding and/or administration of any service, there’s always the issue of what to do about people who can’t afford a certain service. It’s probably not a big deal if all golf courses or swimming pools are private because not golfing or swimming isn’t going to kill anyone. Regarding fires, though, there’s the chance that someone wouldn’t have insurance or might be trapped in a building they don’t own and wouldn’t know if help is coming. I generally favor the private sector, but if life and death is involved (an immediate threat, unlike food or water that people can go without for a little while) I feel ok about government intervening.

    The question I have is this: is it illegal to start up a private fire fighting company or do those exist? If it’s illegal, then I think it should be legal. People shouldn’t have to count on public fire fighting services to save their life if they’re worried they won’t get there in time or do a good job.

  2. David says:

    The way I was thinking about it was that someone who can’t afford insurance would not own their residence (in the vast majority of cases). If they are renting, then their landlord would be paying for the insurance so the residence would still be of interest to the insurance companies. Even on a building that is not insured, unless it is set far away from any insured building the insurance companies would still have an interest in providing firefighters to put any fires out.

    I certainly have no problem with the idea of this being a government service, but it was an interesting idea that I felt like exploring.

    After reading your comment I realized that knowing who to contact in an emergency is very important. That’s why emergency services have one phone number virtually everywhere in the country (911) – if privatizing fire departments would interfere with that I would consider that a deal killer.

    As to the issue of legality regarding private fire fighting companies – I have no idea. It’s an interesting question.

  3. Yes, the 911 issue is very important. I’ll also add that though I think government has a role in providing fire fighting services, I do think that most fire departments can be run much more efficiently. Without getting too detailed, there are ways to organize and allocate these services to get a lot more bang for our buck. For instance, fire fighters sit around much of the day polishing their trucks or playing cards. There’s got to be a way to coordinate so we don’t have to pay these guys to do that when they’re not needed. Their retirement benefits are also usually huge. I think we should pay them well, but it gets a little excessive at times. I guess the problem of inefficiency is inherent in any government program or service.

  4. David says:

    Inefficiency is definitely a standard feature of government services, but I wonder how you would propose to make better use of firefighters’ time – light fires on a more regular schedule?

  5. This is from 1992, but here’s one take on it.

  6. David says:

    Thanks for sharing – that looks like an interesting read. (It also suggests that private firefighting companies do exist – as you had wondered earlier.)

  7. Reach Upward says:

    Hmmm…. When a property is burning, it’s not just the property that is at stake, but also all adjoining properties. They all need to be taken care of in a coordinated effort. I’m not sure how that would work if everyone was contracting their own private fire department. It’s not quite the same thing as contracting your own auto insurance, although, it is required by law, as I’m sure contracting for fire insurance would be.

    Our city coordinates with two adjoining cities to fund a fire department. In November there will be a ballot initiative to break off the department as its own governmental entity. The portion of property taxes that currently go to the cities for fire services would go directly to the department.

    I don’t know if the situation would be better if the cities instead hired a contractor to provide this service.

    The fire insurance concept you suggest sounds awfully similar to Mitt Romney’s health insurance fiasco in Massachusetts. It seems that fire service providers would find their revenues controlled by the state anyway, but insurance companies would get a slice of the pie as well, driving up costs.

  8. Jeff T. says:

    I assume you recently commented on a post about taxation on Mormon Matters…

    I think it is a fallacy to assume that just because something needs to be done, that it should therefore be done by the government via taxation.

  9. David says:


    It’s interesting that your city is currently dealing with this issue – I thought I just made the idea up all by myself.


    I do not comment without leaving a link to my identity. Until today I did not know anything about Mormon Matters. I assume that you are referring to this comment by DavidH. (There is no “h” anywhere in my name.) I just have to say that I do not agree with everything he wrote (and I would not be surprised to learn that he was being sarcastic), but I find his remark about privatized fire companies to be an amazing coincidence. Also, I agree that it is a fallacy to assume that every necessary or desirable thing should be done through taxation and the force of government.

    I can see from the direction of the comments that I did not do a good job of articulating my idea.

    My idea was not to replace universal fire protection with contracted services. My idea was to change the source of funding for those services from government to insurance companies – with all companies that provide auto, home, or life insurance contributing to pay for the services.

    The coverage would still be intended to cover everyone but since insurance companies operate in pursuit of a profit they would have incentive to minimize costs. Because they cater to customers they would still have incentives to provide effective fire protection services (besides the fact that most of the property they are protecting is insured – and all fires have the potential to spread to insured properties even if they start at uninsured properties).

    I would expect insurance rates to rise, but I’ll be that the insurance companies could provide the protection for a lower cost than the amount we currently pay in taxes for our fire departments.

  10. alliegator says:

    I’m not sure they could do it for a lower cost, or that they would try to do it for a lower cost.

    Insurance companies are set up to make money. I don’t think it’s a good idea to take a government service and turn it into something that still has to provide the same amount of service but also has to make money on top of that.

  11. David says:

    Whether they would do it for a lower cost is obviously an open question, but consider that preventing and putting out fires is in their business interest already, and that they would have to compete with other insurance companies for their profit – which profit comes from offering insurance. Good fire protection simply lowers the amount they have to pay in claims. no single insurance company would “own” the fire department, they would simply fund it and have the power to manage it in the most cost effective way they could find.

  12. Reach Upward says:

    That’s intriguing. The incentives differ from health insurance. Although in both instances insurance companies improve profits by keeping costs down, it seems that there would be far greater incentive for prevention and rapid response for fire than there is for health issues. Fire is more of a clear cut matter.

    I also wonder how this would work with incentivizing property owners to take preventative measures, such as are currently enforced by code. Either the insurance companies would have to lobby governments to pass and enforce codes, or insurance companies would have carrot-and-stick rate structures to encourage preventative measures, or perhaps a mixture of both.

    I agree that the question is open as to whether this system would decrease cost or improve services. I understand the argument that there would be greater incentive to do so, but I’m not sure I buy it completely. I lean libertarian, but I’m no utopian. I wonder if there is a real functioning model that we could look at.

  13. David says:

    I’d love to know if there is a working model of this, but I doubt there is. I suspect that the closest we would find is government funding paying for contracted fire department services.

    If this were tried I would expect the insurance companies to try for as much government regulation as they could get with carrot-and-stick rates for everything else.

  14. alliegator says:

    I would think that preventing their home, along with all their worldly posessions (not to mention their lives or the lives of pets) from burning down is a pretty good incentive for property owners to take preventative measures.

    Maybe that’s just me though. 🙂

  15. David says:

    I think that’s a good incentive, but I’m confident that homeowners are not always aware of what the risks are or what things they might do to mitigate those risks. On the other hand, I’m quite confident that insurance companies have studied the risk factors and the prevention steps – they base their rates on those things.

  16. alliegator says:

    That’s true.

    It is an interesting idea to think about.

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