Thunder Bay Fire Rescue plans to collect $100,000 annually from insurance companies, with help from a third party contractor.
The fire department hopes to use the money to put together an equipment reserve fund.
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CBC reported that the city council will look into signing a contract this evening with Fire Marque – the contractor tapped to collect the fees. On Fire Marque’s website, the contractor claimed that it could “provide funding to the community’s fire department.”
According to a report prepared by city administration, Fire Marque would attempt to collect “reasonable fees” from a property’s insurance company following a fire. The fee collected could range from $1,000 to $5,000. Thirty per cent (30%) of the money would be retained by the company, while the rest goes to the city.
The city report also noted that if an insurance company refuses to pay the claim, the specified amount could be added on to a property tax bill, which could then be collected “indirectly” through insurance.
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Other cities in Ontario (such as Kitchener, North Bay, Oshawa, and Sudbury) have used this system to recoup their firefighting costs. Meanwhile, other municipalities have told Thunder Bay that they are “ethically opposed to the process,” worried that insurance premiums in the province would increase as a result.
Fire Marque stated that insurers often budget for a firefighting fee, so the collection process should not affect premiums.
The fee collected by the contractor will not have any effect on a claim from an individual owner; this only applies to homeowners with insurance.
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