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TFS (Part 4) - Fire Departments

February 23, 2009 - 12:00am
Nick Coons by Nick Coons


Fire departments are one of the few lines on the budget that is rarely underfunded. People love firefighters; they're heroes and they save lives. Don't mistake the desire to separate fire protection from government as a wish to see this service dwindle away. In fact, many municipalities currently utilize private fire departments, which provide better service, and save money while doing it.

When the city outsources their fire service to a company that must bid both in providing a competitive price as well as in fast response times, we end up with better results than a city-employed fire department as has been proven in many cities across the country.  But I propose one step further, and that would be to completely separate fire services from government.  The first thought that may come to mind is how this might logistically work, arriving quickly at the conclusion that it won't.  Imagine your home on fire, you frantically pull out the phone book and search through to find which fire company has the prettiest ad.  You call them on the phone and discuss rates, arriving at an agreement.  The firefighters show up at your house, wait for you to sign on the dotted line, and proceed to put out the fire, presenting you with a bill at the completion of service.  All this nasty paperwork and negotiation while your house is being burnt down; what a mess!

Luckily, this is not how it would work.  Any company that tried to employ such tactics would find themselves without customers and quickly go out of business.  Virtually every homeowner pays a mortgage (that is, very few people have their homes owned free and clear).  Banks holding mortgages require that homeowners purchase insurance in order to give them a loan to purchase the home.  Understandably, banks want to protect their investment.

The average insurance policy in Phoenix for a $200,000 house is about $600/year.  Each insurance policy can include fire coverage such that if a call is placed to 911 in order to put out a fire, the call is directed as it normally would be, and the bill for services is paid for by the insurance company as part of the provided coverage.  As banks currently require that homeowners with mortgages carry insurance, they would likely require them to carry fire coverage as well.  The estimated cost for this coverage is about $10/year, keeping in mind that you'll save more than that in taxes as you're no longer paying to fund a city-run fire department.

But what about those that have their homes paid off and aren't required to have insurance?  Most of them still have insurance as well, as the cost of insurance is far less than paying for the loss of their home in the event of a disaster.  Anyone opting to not pay $10/year for their fire coverage would have to pay for the fire company's services out of pocket.

Related Content:

Do Rich/Wealthy People Deserve Tax Breaks? - Nick Coons
TFS (Part 3) - Police, Courts & Prisons - Nick Coons
TFS (Part 2) - Public Goods - Nick Coons

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Show Date Aug 2, 2015
Topic Secret Science

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