I like that theory
Metal sided testing area outside my metal sided house, correctly wired circuit breakers, hose nearby, easy-disable mains power.
It takes a fair amount of time for something like a PSU to create a sustainable fire really, unless you're testing it on a nylon carpet that you've been sifting blackpowder with.
Really I suspect there are very few house fires that couldn't have been put out if noticed
and attacked in the first 30 seconds. Don't Panic, mostly.
Basic plan is to rip the cable out of the kill-a-watt/wall/anything, once that's done odds are it'll go out quickly by itself. If not, we can move on to extinguishing it.
I a video of myself
trying to blow a PSU up would be better evidence for the insurance company than me, really.
What I
don't do is leave the testing area while the thing is running.