First off I have to say I know nothing about this other then we get it but thought I would do some research, and where better to start then here, Google will be my next stop. Maybe this is just a state thing but here we get money from the insurance companies, better known as 2% money. Just a guess but we must get 2% of something, premiums?, sales? Valuation? Population? Who determines this?, is it a government thing? What's the history? We get around $700 annually and seems a little low, I believe this comes through our city government and till a few years ago they kept it, they didn't know either. Any info would be appreciated.
In Pennsylvania, departments also get an insurance rebate at the end of the year. I call it a rebate, because I don't know what else to call it. However, I too am clueless as to where it comes from, why and how. Ours is a bit more substantial than $700, though.
The 2% comes from the state for us and in order to receive it a dept has to be proactive with inspections and prevention programs. I would like to say I know where the state gets the money for that, but that is the basic requirement for a dept to get the 2%.
Our state also does shared revenue, which comes from state taxes. This money goes to municipalities to spend on such things like fire, police, public works etc, similar to a tax refund. In recent years though such revenues have declined and makes it more difficult for municipalities depending on that.
I know the rules that govern how it's spent, well somewhat, but don't really care at this time. I think I understand what you are saying, does that count only for the home office? In other words if Allstate's home office is in (guess) Ohio and that is my carrier then 2% of my premium goes to the fund right? Or can they claim a satellite office in Illinois and not pay? Who is in charge of this? I'm sure this is not done local, is it county wide? State wide? Is the money split up county or state wide? Google was of little help.
"The Foreign fire tax program under sections 9104 and 9105 of the NYS Insurance Department mandates that any foreign or alien insurance company that writes fire insurance in New York State, must contribute 2% of the fire premiums written on property located in NYS to be distributed to the fire departments and fire districts statewide. Excess line brokers licensed to write business in NYS under section 2118 of insurance law, must contribute 3% of fire premiums written on property located in NYS."
This may be totally irrelevant, but it may apply. Way back in the mists of time, insurance companies owned the fire brigades in London (England). There came a point when the separate Brigades amalgamated to form one large Brigade and the insurance companies financed it in relation to the value of property they insured. Later local government took over responsibility for fire protection and took control of the insurance fire brigade but they still levied the insurance companies for it's partial support. This has remained in place ever since.
I suspect that your 2% is much the same thing, you protect the interests of the insurance industry so they have to pay a levy.
I heard some time ago (and had forgotten about it) that insurance companies build this "rebate" for fire departments into their premiums. We've never gotten anything from them here. We are in Texas. Thanks for the reminder. It's worth a look.