SD31 - The Feasibility of Self-Insurance for Volunteer Fire Departments and Rescue Squads to Cover Their Emergency Vehicles

  • Published: 1989
  • Author: General Assembly. Joint Subcommittee
  • Enabling Authority: Senate Joint Resolution 159 (Regular Session, 1988)

Executive Summary:
This study was undertaken in accordance with Senate Joint Resolution No. 159 of the 1988 General Assembly, which requested the establishment of a joint subcommittee to study the feasibility of self-insurance for volunteer fire departments and rescue squads to cover their emergency vehicles. The study was requested because of concern over the continued availability of the services which volunteer fire departments and rescue squads provide to the citizens of this Commonwealth. In recent years, the high cost of insurance coverage has caused some volunteer emergency organizations, particularly those in rural areas, to disband or go without coverage.

Although volunteer fire departments and rescue squads complained of the high and unjustified cost of insurance coverage for their vehicles to the joint subcommittee, an agent of the principal insurer of these vehicles reported that "insurance for volunteer fire departments and rescue squads has been widely available at extremely favorable rates in comparison with other insurance lines during the subsiding hard market" and that the insurer was unaware of any which had been forced to disband because of insurance problems. However, the results of a survey on the premiums charged to and claims made by volunteer emergency organizations and information supplied by the principal insurer indicated that premiums for such coverage were high in relation to the claims paid.

The joint subcommittee determined that a self-insurance program for volunteer fire departments and rescue squads would not be feasible given the high start-up and participation costs of one. It recommends that no legislative action be taken on the issue until the Bureau of Insurance has surveyed these departments and squads and examined the premiums paid and claims made by them. The subcommittee has requested the Bureau to report its findings to various legislative committees and groups which can take any necessary legislative action.