The Fire Chiefs’ Association of British Columbia (FCABC) is lobbying for changes to B.C.’s Insurance Act to require those buying or renewing home or contents insurance to declare there is a working smoke alarm in the home.
Brokers and insurers in the province agree with the basic aim of the lobby, but they part company with the fire chiefs on how to achieve the goal.
Nobody will argue that working smoke alarms save lives and reduce fire losses, insurance industry representatives say. But they see a big difference between brokers simply reminding consumers to install and test smoke alarms, and brokers being compelled by law to ensure consumers have a working smoke alarm before issuing an insurance policy.
“I know that the brokers and insurers have some serious reservations in terms of putting the renewal of an insurance policy conditional upon the homeowner proving that they have a working smoke alarm,” said Serge Corbeil, the
Insurance Bureau of Canada (IBC)’s government relations manager for B.C., Saskatchewan and Manitoba. “It’s fraught with issues.”
For example, new legislation would potentially increase the number of professional liability lawsuits filed against brokers. The concern here is that brokers would be sued in civil court for breaking the law in situations in which they failed to ask about a working smoke alarm.
“Brokers have legitimate concerns about that,” said Corbeil.
“Take, for example, a scenario in which someone renews their insurance. Sometime later there is a fire, and the lawyer says to the policyholder:
‘Did the broker ask you if you had a working smoke alarm?’
‘Well, I don’t think so.’
’Well, by law they are supposed to ask you.’
“Now maybe you can turn around and go after your broker.”
Home insurance does not have the same mandatory requirements as auto insurance does in B.C., including police enforcement, the Insurance Brokers Association of B.C. (IBABC) said in a statement to Insurance Business.
“There is very little an insurance broker can do to compel a consumer at point of insurance purchase to disclose the existence of a smoke alarm, to install a smoke alarm, or to ensure it is functioning 24-7,” the IBABC said. “We doubt that it’s the intention of government or first responders to have brokers refuse to issue insurance for a dwelling, or to deny an otherwise covered loss, because of a lack of disclosure about a smoke alarm.
“The insurance industry can and does provide ‘carrots’ to encourage the use of smoke alarms and other mitigation measures, but it’s not feasible for the insurance industry to provide the ‘stick.’”
Garis met with Corbeil on May 31 to discuss these and other issues.
Fire chiefs are seeking support of the province’s brokers and insurers for a legislative solution linking smoke alarm education with insurance policy renewals.
“Our research indicates the greatest economic gain for a working smoke alarm is to the insurance industry and the Union of British Columbia Municipalities (UBCM), and this issue is gaining and will gain momentum,” Len Garis, fire chief for the City of Surrey, told Insurance Business. “We would like to find a win-win solution [with the insurance industry], but it needs to occur soon.”
Ultimately, Garis is not convinced by some of the industry’s concerns. For example, he said the potential for increased E&O exposure did not deter first responders from helping people to install smoke alarms in their houses. “We were just doing the right thing,” he said.
Garis says the fire association will be pressing ahead with its lobby for legislative change, while Corbeil said “we’re going to tell the government that it’s not a workable solution, in terms of putting that in the law.”
Research commissioned by the fire chiefs says nearly 70% of the B.C. homes that caught fire from 2006 to 2011 did not have a functioning smoke alarm. The average fire loss in a home that did not have a working smoke alarm doubled the fire loss in homes that had one.
“A working smoke alarm in every B.C. home could reduce annual fire deaths by 32%,” the association says in a press release.
