Lodi firefighters’ union claims homeowners’ insurance rates depend on Measure L vote

Oct. 19--Could a potential downgrading of the city's fire department lead to an increase in homeowners insurance rates, or is it a political smokescreen?

The Lodi Professional Firefighters, the local firefighters union, on Wednesday made a post on their Facebook page saying that the city's Insurance Services Office rating will drop from Class 2 to Class 3. The post states that a lower rating would cause homeowners insurance premiums to increase by approximately 5 percent, and passing Measure L -- a half-cent sales tax increase that would go to the city's general fund to pay for services -- would help prevent this from happening.

One local insurance professional said that the ISO rating decrease would not cause premiums to rise, however, and a Measure L opponent said the Facebook post was a political ploy.

Jeff Hood, director of the City of Lodi Parks, Recreation and Cultural Services Department, said the city received the ISO report on Monday saying that unless improvements are made within 12 months, the city's ISO rating will be downgraded from Class 2 to Class 3 effective October 2019.

"Essentially, a big piece of that is our staffing levels," Hood said. "It is true that Measure L is intended to improve public safety, in part, so the firefighters' organization has connected some dots and they're free to do so."

A spokesperson for ISO, a New Jersey-based company owned by Verisk Analytics that evaluates fire departments across the country for insurance providers, referred the News-Sentinel to the Lodi Fire Department for more information about ISO's rating process.

Lodi Fire Chief Gene Stoddart said the department's last ISO evaluation took place in 2012, and that ISO looks at the city's dispatch, fire department and water system during the evaluation.

The water system accounts for 50 percent of the evaluation Stoddart said, with the fire department accounting for 40 percent and communications making up the remaining 10 percent.

ISO gives a score out of 100 possible points, Stoddart said, with a score of 90 to 100 points resulting in the highest rating of Class 1, a score of 80 to 89.9 points resulting in a Class 2 rating and a score of 70 to 79.9 points resulting in a Class 3 rating.

"Our score was in the low 70s (this year), whereas the last time we were in the mid to low 80s," Stoddart said.

When Stoddart spoke with ISO following this year's evaluation, he said they told him that while there were several non-cost items that could get them more points, there were not enough for the city to keep its Class 2 rating.

"Unfortunately, we probably won't be able to do it without being fully staffed," Stoddart said.

Although the department received a Class 2 rating in 2012, Stoddart said the department's staffing levels began decreasing in 2008.

Besides fully staffing one of their engines which was unstaffed -- or "browned out," -- for approximately 60 percent of the last year, Stoddart said the fire department would have to update its training and water systems, both of which he said would require additional funds.

Philip Marcus, a Lodi-based AAA insurance agent, said that the city's ISO rating dropping from Class 2 to Class 3 would not affect homeowners insurance premiums.

"A rating of one through four doesn't impact insurance rates in any way," Marcus said.

Although Marcus supports Measure L, he said that AAA looks at protection classes and wildfire zones when determining insurance rates, and that rates only increase when ratings reach Class 5 through Class 10.

"Here in Lodi, if we move from a two to a three, there will be no change to your insurance rate," Marcus said.

While not all insurance companies use ISO for ratings, all providers need approval to raise their rates. Nancy Kincaid, a spokesperson for the California Department of Insurance, said that insurers must submit their rate adjustments to the insurance commissioner for approval, including historical losses from the past two to four years as well as their projected losses for the future.

Insurance rates can only change if CDI agrees with the justification and the commissioner approves the changes, Kincaid said.

"We don't always agree with their adjustments, and we sometimes find math errors," Kincaid said. "Consumers should be confident that their rates can't go up without being justified and approved."

Lodi taxpayer advocate Alex Aliferis said he believes the Lodi Professional Firefighters making the post approximately three weeks away from the Nov. 6 general election is a political ploy intended to ensure the passage of Measure L, which he believes will not solve the city's financial issues stemming from rising pension costs.

"It's another scare tactic to force people to vote for Measure L, and people shouldn't fall for it," Aliferis said. "We're not looking at the problem, we're putting a temporary Band-Aid on the issue. The only way we're going to solve this is with statewide pension reform."

Lodi City Manager Steve Schwabauer said rising pension costs are one of the contributing factors in the city's financial issues.

"There are a whole lot of things that go into the mix of what's driving Lodi's forecast deficit, and that's one of them," Schwabauer said.

Lodi Fire Capt. Trevor Lambert said a source from the insurance industry who wished to remain anonymous told him that the city's ISO rating dropping from Class 2 to Class 3 would lead to a 5 percent increase in homeowners insurance premiums.

Lambert denied that the Facebook post was a political move, saying instead that it was intended to provide Lodians with a tangible number to show how the fire department's services have decreased due to a lack of staffing.

"We're not trying to politicize this. Our intent is to give them information on what's happening to our fire department and where we will be headed if (Measure L) doesn't pass," Lambert said. "When I started in 2003, we had approximately 25 percent more firefighters on line than we do right now. It's getting harder and harder to keep the level of service that I think the taxpayers deserve."

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