First thought is that it is unlikely to be true as you are not only preventing further damage, i.e. the need for them to pay out more and also protecting others from collateral damage.
The only time I was driving a car that caught fire it was a Kit Car belonging to the wife that I was delivering to the punter who bought it, down in Cornwall. I had no fire extinguisher on board but I did have a gallon of water, which I poured over the fire and put it out. (Caused by a damp distributor of all things.) the parts needed replacing, a new fibreglass bonnet had to be made and paintwork had to be done. The insurance never batted an eyelid they just paid up without asking, "Well, who put it out then?"
