My sim set herself on fire lighting the fireplace. She extinguished herself in the shower but wouldn't go near the fireplace due to her fear of fire. She had to "extinguish" a fire, I guess so she could prove that she could. I had her put out the fire in the fireplace, but that didn't make the fear go away. Her best friend had to come over, light the campfire in the backyard so Oceania could go outside and put the fire out. Oh and one thing, after she extinguished the fire, the fear didn't go away, right away. Instead, I saved, went to map view then back to her and the fear was gone. I don't know if that the way it's supposed to happen, but that's how I got rid of it.
That's the only fear my sims have had so far.