Starting Aug. 1, the Marysville Fire Department began issuing invoices for its responses to certain calls. Fire Chief Ron Karlen said it’s a way to recoup a portion of the service costs already covered by insurance companies and as a way to hold individuals accountable if they are found to be at fault.
“It’s a process in which we can charge for responding to certain types of incidents, primarily relating to either fires or vehicle accidents or hazmat incidents,” Karlen said. “Just about every insurance policy has a process where they pay a fee for first responders under those criteria if we submit a bill. It’s really not a new process, with 1,100 fire departments throughout the United States using this system to recoup costs for responses.”
Fire Recovery USA out of Roseville is the cost recovery company that operates the program and is in charge of issuing invoices on behalf of the fire department. Fees are generated based on the department’s response, so factors such as apparatus used, personnel required and the time it takes to address the issue.
“Most cities and fire departments are struggling financially, so when we first heard about and researched this, we felt it was an opportunity to generate some revenue for the fire department,” Karlen said. “So some of the things we struggle with – staffing issues, apparatus issues, equipment issues – hopefully we’ll be able to generate some revenue to start fixing those things directly.”
Most insurance companies have a cap on the amount they’ll pay out for first responders, so the department will only collect what they are able to so long as there was no negligence involved. However, if the department responds to a DUI call, a vehicle pursuit involving police, or if there is a negligent fire started by someone that requires their assistance, the department has the opportunity to bill the individual.
For example, the department responded to a structure fire recently that cost $3,900 for total response. An invoice was sent to the insurance company, which capped out at $500 on the claim, so the department collected those funds, and since there was no negligence involved, the property owner wasn’t impacted.
Fire Recovery USA estimates that the program could generate up to $100,000 for the fire department in its first full year.
“That would make a huge impact for us. It would basically allow us to hire another person, which we are in need of three more people,” he said.
The department was already charging people for negligent incidents in the past, all that changes now is that Fire Recovery USA will be doing it for them, Karlen said.
In the past, the department’s main source of revenue was from the city’s general fund. However, he said, the funds from taxes weren’t sufficient enough to support an adequate fire department. On top of that, the department was losing money by not sending invoices to the insurance companies who already have it in their policies to cover costs associated with first responders.
Karlen plans to present a report to City Council members at one of their meetings later in the year on how things have been operating with the new program and to discuss ways of improving it in the future.