New ladder company may not impact insurance rates yet

Jan. 10--The addition of a new Owensboro Fire Department ladder company serving the city's burgeoning east side may not have an immediate impact on insurance premiums in that area, officials said Tuesday.

Fire Chief Steve Mitchell said the Insurance Services Office will conduct its audit of the city's fire mitigation capacity in early February, a full month before a new ladder truck and six additional personnel will join the staff.

"I will, of course, push strongly to include that plan," Mitchell told the city commission Tuesday during a special-called meeting. "If that doesn't occur -- if they won't give that to us now -- we'll want to request another audit in two years."

ISO Public Protection Classification ratings are a key part of how insurance companies determine fair premiums and set commercial fire insurance rates. The higher a city's score is out of 100, the lower its insurance rates tend to be. Owensboro was last audited in 2012 and earned an 86.29 Class 2 score, which Mitchell characterized as a strong, healthy score.

But Owensboro has grown since 2012, particularly along the Kentucky 54 corridor, which is partly why Mitchell made such a strong push during the 2017 budget talks to include funding for an additional ladder company to serve that area. ISO takes into account the distribution of companies and how well fire departments comply with agreed-upon standards of service and response times.

In order to stay competitive, as some insurance companies rely on theoretical risk evaluations instead of purchasing ISO data, the office has included a community risk reduction analysis this year. That will accompany fire department capability, dispatch response and the city's overall supply of water hydrants. It could help mitigate any losses the department may incur on eastside deployment by February.

"This is the fire prevention efforts within the city, and I'm confident we're going to do very well in this area," Mitchell said. "We've been studying this over the last few months knowing that this was coming up, and we do probably 90 to 95 percent of the things that they request that you do in the city already. I'm looking forward to this part of the rating."

Community risk reduction factors include the adoption of a fire code, which Owensboro has; fire code enforcement, which Owensboro does; fire prevention staffing, which all of the Owensboro Fire Department is certified to do; prevention programs and ordinances and safety classes -- all of which the city has enacted or maintained for some time.

Mitchell said he also suspects ISO will rely more on operations than it may have in the past and will include real-time fire suppression data in addition to computer-generated access-time models. In many cases, he said, stations are able to respond to calls faster than computers may predict they could, which could further benefit the overall score.

Still, considering the three years' worth of data ISO is likely to need, he doesn't expect the city's score to change too much in either direction this year. Once the new ladder company has been active in the city for some time, however, scores could very well improve, perhaps having a tangible impact on future insurance rates.

Austin Ramsey, 270-691-7302, aramsey@messenger-inquirer.com, Twitter: @austinrramsey

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