WHEREAS the Province of Alberta, Minister of Finance, is responsible for amendments to the Insurance Act of Alberta; and

WHEREAS there are no existing minimum standards in insurance policies for the payment of fire department charges in Alberta; and

WHEREAS the costs incurred by landowners for fire-fighting costs on uninsured property (eg. pasture land, bush land) are not always covered adequately by fire insurance policies in Alberta; and

WHEREAS Forest & Prairie Protection Endorsement is covered under Liability which by its definition the insured (land owner) must be negligent; and

WHEREAS according to the insurance companies’ definition of Fire Department Charges, fire insurance policies are to cover costs incurred by the owner to extinguish a fire that is threatening or destroying an insured peril; and

WHEREAS the Forest & Prairie Protection Endorsement is to pay third party expenses, which the owner becomes obligated to pay by reason of liability imposed upon him/her by law or statute pursuant to the relevant provision of the Forest and Prairie Protection Acts of the Provinces of Canada;

THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties lobby the Finance Minister, Government of Alberta to change the regulations to address the following matters:

a) Setting provincial standards for minimal coverage’s for fire loss policies including expenses and fees for fire fighting, and

b) Expanding the Forest & Prairie Protection Endorsement definition to cover all expenses incurred, per occurrence, regardless of which authority level attends the fire, and

c) Removing the limitation of coverage with the term “negligent” being used within the liability section of policies in relation to the Forest and Prairie Protection Act.

dual effect: first, there are now a number of rural municipalities that charge landowners with the costs involved in fighting fires; second, when these costs are charged the landowners have significant bills to pay. As well, the Provincial Government also has charged for their services, including water bombing.

Insurance policies for landowners are not always adequate to protect landowners from these costs which are largely out of their control.  If a fire occurs on land or property that is not insured (eg:  bush land or pasture), many policies will not cover the costs of extinguishing a fire on that property.  Even coverage for extinguishing a fire that is covered is insufficient.  Some policies only include $1,000, which is not enough to pay the true costs of even a very small and quickly extinguished fire in a rural area.  Clarity is required regarding fires that are caused by events or actions that are out of the control of the landowner (eg:  lightning, arson, cigarettes being thrown out of cars, etc.).

Therefore, what is needed is for the Provincial Government to require insurance companies to have the following features included in their fire insurance policies for rural properties:

• To have a minimum standard level of coverage for Fire Department Charges.  A suggested minimum coverage is $10,000.  Additional coverage can be purchased by the landowner for a nominal fee (average cost is $1.25/$100 of coverage).
• Forest & Prairie Protection Endorsement coverage is a coverage which would remain optional and landowners could continue to purchase this coverage for a minimal fee.
• To remove the Forest & Prairie Protection Endorsement from the Liability section in insurance policies, eliminating the “negligent” issue being used by insurers to deny claims.
• That regardless of which authority level responds to a fire which is not threatening or destroying an insured piece of property that the Forest & Prairie Protection Endorsement would respond to pay the costs by the landowner, to the maximum of their policy limit.
• This insurance should cover fires that are not caused by negligence on the part of the landowner, and which provide protection to landowners when events or actions beyond their control cause a wild fire on their land.

This issue affects rural municipalities directly, as landowners can and do have difficulty when charged for the costs from a fire department for extinguishing a fire destroying their insured property, or charges related to extinguishing a fire on bare land owned/leased or rented by the landowner.  In the end it is the landowners’ responsibility to ensure that they have adequate coverage, but a standard of coverage and the removal of “negligence” from the equation will help to ensure that landowners are not faced with daunting costs.  As we all try to manage our budgets municipalities can no longer afford to waive these fees.

Resolution 12-10S: THEREFORE BE IT RESOLVED that Alberta Association of Municipal Districts and Counties request that Alberta Sustainable Resource Development amend the Forest and Prairie Protection Act Section 7(1) by excluding fighting and controlling non-structural fires within occupied public lands from the responsibility of municipalities.

Environment and Sustainable Resource Development: 

Wildfire insurance is important for all landowners. Environment and Sustainable Resource Development is aware there is a variety of wildfire insurance coverage and providers available to landowners. The ministry has no jurisdiction with respect to the insurance industry’s wildfire insurance policies or coverage. 

Treasury Board and Finance:

Currently, the Superintendent of Insurance does not mandate the limits and type of coverage required by property insurance policies.  As the Alberta Association of Municipal Districts and Counties (AAMDC) resolution would be a new policy direction for government, Alberta Treasury Board and Finance (TBF) would have to undertake discussions with stakeholders that could be affected by a change in the current environment.  Those stakeholders would include, in this case, the insurance industry, municipalities, other government departments, and Albertans who carry the type of insurance coverage at issue.

TBF would need to gather and collect evidence on how different stakeholders would be affected, including the economic impacts on industry, consumers, and municipalities.  The ministry would also need to ascertain stakeholder support and opposition for any proposed changes and how those changes might impact the insurance industry as a whole.

TBF appreciates the AAMDC bringing this matter to its attention.  The ministry would be pleased to receive any further information and details in any formal proposal the AAMDC wishes to make on this issue.

The AAMDC understands that this change in regulations would entail significant stakeholder engagement as is expressed in the response from the Government of Alberta.  Though the government’s response identifies parties that would be involved in this engagement process, no intent to proceed with that engagement is indicated.  This resolution has been assigned the status of Unsatisfactory and the AAMDC will continue to advocate on this issue through future meetings with the Ministers of Environment and Sustainable Resource Development and Treasury Board and Finance.