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Costs of Fire Damage & Loss

Last Updated: October 25, 2017

Everyone knows that fires can cause devastating destruction. If you have been personally affected by a residential or commercial fire, you understand this better than most. But what are the overall costs of fire damage and loss?

The most recent Total Cost of Fire report from the National Fire Protection Association (NFPA) covers estimated losses from 2011. That year, 1.4 million fires were reported to US fire departments, resulting in damages and losses of $329 billion, or 2.1 percent of the US gross domestic product. By breaking down the total cost of fire, you’ll recognize the importance of installing adequate fire protection equipment in your building to preserve life and protecting property.

Human Losses

Human loss is the worst type of damage a fire can cause. Tragically, deaths from fires in the US are among the highest per capita in the industrial world.

  • Lives lost: In 2011, 61 volunteer and career firefighters lost their lives battling blazes. An additional 3,005 civilians were also killed. The U.S. Consumer Product Safety Commission has created formulas dominated by pain and suffering valuations that place a monetary value on lost lives. With the acknowledgment that no amount of money can make up for losing a loved one, these losses are valued at $31.7 billion.
  • Medical treatment of injuries: An estimated 17,500 civilian fire injuries occurred in 2011. This is considered a conservative estimate because many civilians injured in fires never report to the fire department. Medical costs also vary because some wounded people don’t obtain even basic medical care. Therefore, the $31.7 billion valuation explained above covers estimated medical costs.

Economic Losses

When fires burn down homes and businesses, they cause significant economic losses, also referred to as property damage. The total amount lost in 2011 comes to $14.9 billion. These losses can be divided into two categories:

  • Direct property damage: When a home or business is damaged or destroyed in a fire, the losses resulting directly from the flames are known as direct property damage. The total losses in this category totaled $13.3 billion in 2011.
  • Indirect loss: When flames cause damage, it takes time and money to recover. This is known as indirect loss, which includes the cost of business interruption, temporary housing, and missed work, along with intangible losses such as heirlooms and pets lost in a fire. In 2011, nationwide indirect losses from residential and commercial fires totaled $1.6 billion.

Provisions to Prevent & Mitigate Fires

Not all fire losses occur after the fact. In an attempt to limit the occurrence of fires, people invest in prevention and mitigation efforts. The goal in the fire protection industry is to achieve adequate fire safety at a lower cost since, surprisingly, prevention and mitigation methods account for well over half of the country’s total fire costs per year.

  • Fire departments: One of the highest fire costs is the expenditure of local career fire departments, which totaled $42.3 billion in 2011. An even greater cost is the monetary value of donated time from volunteer firefighters, which totaled $139.8 billion. This amount is estimated by determining what it would cost local communities if the services provided by volunteer firefighters were covered by paid career firefighters.
  • Building construction and installation of fire protection equipment: Constructing new buildings with proper fire protection measures is a large part of preventing fires and mitigating damage. The total cost for such construction in 2011 came to $31 billion. This amount is comprised of passive protection, such as fire doors and fireproof concrete, as well as active protection, including fire alarms, sprinkler systems, and automatic fire suppression.
  • Insurance: The net cost of fire insurance coverage in 2011 was $20.2 billion. This figure is estimated by subtracting customers’ claims from the monthly premiums they pay for fire insurance.

Schedule Fire Protection Services in the Mid-South

Installing fire protection equipment in your building is one cost of fire, but it’s a worthwhile expenditure to prevent property damage and loss of life. Whether you need fire alarm installation, fire extinguisher training for your employees, or a code compliance inspection, State Systems can provide the services you need. As a trusted fire protection company in the Mid-South, we help make buildings in Tennessee, Arkansas, Mississippi, and Alabama safe and code compliant.

To learn more, or to schedule fire protection services with an experienced provider, please contact State Systems today.

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