The institute surveyed all 2,400 fire departments in the state on the issue. Of the more than 500 companies that responded, about half said they bill insurance companies.
The survey showed that 60 percent of the departments that do bill recover from 1 percent to 20 percent of the amount they seek.
There is no law in Pennsylvania to force insurance companies to pay recovery costs.
The number of fire departments billing insurance companies for cost is on the rise, the survey said. It also said many fire departments are reluctant to adopt the practice because they fear it will cut down on donations and create bad publicity.
Don Eshelman, president of Rescue Hose Co., told the borough council this week that the department will hire F.I.R.E. Inc., of Connellsville, Pa., near Pittsburgh, to bill insurance companies.
He said the fire service is changing and that it's getting harder to find volunteers.
"There has been a 54 percent decline in the number of volunteers in the state," Eshelman said. "For the last two years, our membership has been open to any U.S. citizen. They don't have to live in the area anymore."
He predicted that Rescue Hose would soon have to hire paid firefighters to maintain coverage.
The department started a junior membership program, hoping to bring in more volunteers.
"Burnout has been a major problem. We're a very busy company," Eshelman said.
Last year, the department responded to 1,404 calls representing 11,204 volunteer hours. "That doesn't include preparing the equipment for the next call," Eshelman said.
Brian Higbee, president of F.I.R.E. Inc., said his company has billing contracts with fire departments in 21 states, including Maryland and West Virginia.
"We try to recover actual costs, not salaries. We aren't here to make a profit for the fire companies," he said.
He said an average cost for a fire truck is $500 for the first hour on the scene. The charge drops to $250 for the next hour.
Higbee's company gets 15 percent of all the money it collects.
Eshelman said the only time citizens will be charged will be in the case of auto accidents involving people who don't live in the area. "They will be billed directly," he said.
Rescue Hose Co., will only bill in cases of fire and accidents in the company's own response area. Mutual aid calls will not be billed, Eshelman said.