An excellent post, but I think you neglect some salient points about the retail price. Since it would have to consider the funds not contributed, it would have to be a substantial sum. Let's spitball and say $2,000 as the retail price (a little under $75 times 30 years in the home). That's a fairly large sum for a lot of families, and many may not be able to pay that. The firefighters have no way to assess their ability to pay the sum on the spot, so they'd have to take their word that they can afford the retail price.
So if the retail price is too high, then the firefighters may lose money since they may never collect the retail price for the service. So let's lower the price to something more generally affordable. Let's say $300 (that'd be 4 years of coverage). That's a lot more affordable price, but then there's a lot less incentive to ever pay. If the retail price is too low compared to the insurance price, people will just pay retail when they need it and never pay the insurance price. Again, the firefighters don't get paid.
I think the solution may be something like putting a lien on the house for the retail price to ensure repayment, but I don't know how lien's work or what the legal costs would be for collecting on liens.