I've been told that the cost of deploying the fire department runs into several thousand; this would be a pretty nasty invoice to get in addition to fire damage. The insurance model makes it easier to pay.

Also, in that specific incidence, it wasn't their fire-department. The township was getting fire services from the next station over; not their own. They had to pay monthly fees for this, so without a monthly payment, they wouldn't be convincing those guys to maintain service.