New fire ratings could mean big savings for homeowners

March 04--New ISO ratings effective June 1 could mean huge savings for some Norman rural residents. ISO, or Insurance Service Office, ratings look at fire risk levels and assign numbers that affect the insurance premiums homeowners pay for coverage. The lower the ISO rating, the lower insurance premiums are likely to be.

"ISO comes in occasionally to reassess communities," Fire Chief Jim Bailey said. "There are many factors they look at, such as the water distribution systems."

Properties served by the public water system and located within five miles of a fire station will see their ISO rating change from a 3 to a 2, according to city staff reports.

"The biggest thing for the adjustment in the numbers was the Public Safety Sales Tax that the public voted for in 2008," Bailey said.

The PSST created the funding stream to build two new fire stations, add 30 firefighters and buy two 3,000-gallon tankers. Fire Station No. 9, which serves east Norman, was one of the biggest difference makers.

"The purchase of those tankers and the two new fire stations (Nos. 8 and 9) resulted in helping the people out east," Bailey said. "They will likely see significant savings on their insurance."

Properties not served by public water but within five miles of a fire station will see their ISO rating change from a 9 to a 5, a decrease expected to result in noteworthy savings for those property owners.

"There will still be some areas that still have the 10 rating," Bailey said. "Roughly 60 to 65 percent of Norman is rural past 36th street going to the east. If they are within five miles of the fire stations, they will fall into the 5 rating. Others in the east will still be rated at 10. The only way to bring that down is with additional fire stations."

The fire department requested the evaluation, which was completed in November. City officials were notified of the results earlier this week.

"In town, they will notice it to a lesser degree," Bailey said. "I would encourage every homeowner to check with their insurance companies to see what that means to them."

Though each insurance company determines the premiums for its policy holders, the PPC information is utilized by many insurers, city staff reports. Statistical data on insurance losses show the relationship between fire protection, as measured by the PPC program and low fire losses, according to information on the ISO Mitigation website at isomitigation.com. Norman's investment in fire mitigation follows a pattern many insurance companies believe is proven and a reliable predictor of future losses.

"We commend our residents who supported enhancing fire protection in their community and helped to achieve this significant ISO rating improvement," City Manager Steve Lewis said.

Some local insurance agents have said those ratings are one piece in a complex formula. Zip code can play an important role due to damage caused by severe weather, such as hail, high winds and tornadoes.

"We no longer use ISO for our ratings," said Jim Camoriano, a State Farm spokesperson. "We use a proprietary model that more accurately reflects the risk that's presented to us. Rates are based on a lot of factors, so we look at local claim trends, the age of the house and its utilities, the type of construction -- there's several factors that go into rates. All of those factors go into our rating."

In addition to building Fire Station 9 and buying tanker trucks, additional training, fire prevention programs and mutual aid agreements with nearby communities increase Norman's ability to prevent fires and respond quickly and efficiently when there is a blaze. The higher response time could result in saving property, as well as lives, and may result in insurance savings in the long run, even for companies that don't use ISO.

"For us, our model does a very good job of matching price to risk," Camoriano said. "We commend local fire departments. Any time they're able to improve the ISO ratings, it's fantastic. To the degree that that improves the ability to fight fires, it's also going to translate to safer homes and more lives saved, but we don't use the ISO ratings. I don't know how many insurance companies do; I know several do."

The water supply system and amount of available water, hydrant inspection and flow-testing programs also are factors taken into account in determining the ISO rating, as well as the emergency communications systems, city staff reports.

Joy Hampton

366-3544

[email protected]

Follow me @joyinvestigates

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