Municipal fire departments in the U.S. are reviewed by and receive a Public Protection Class (PPC) rating from the Insurance Services Office. The ISO rating is dependent on factors such as water supply, training, firefighting apparatus and equipment, and other factors.
The ISO rating is used by insurance companies to define the risk factors of your property. It might include items like the distance from the house to the nearest fire hydrant or fire station. The farther away you are, the more damage will be done in the event of a fire, as it will take longer for the trucks to get out there and get the fire out.
Here are some general guidelines to help you understand the benefits of improved PPC ratings for residents and businesses:
- PPC may affect the underwriting and pricing for a variety of personal and commercial insurance coverages, including homeowners, mobile home, fine arts floaters, and commercial property (including business interruption).
- Assuming all other factors are equal, the price of property insurance in a community with a good PPC is lower than in a community with a poor PPC.
When ISO develops a single Public Protection Classification (PPC®) for a community, all community properties receive that classification. However, in many communities, we develop split classifications, which we revised in 2013 to reflect the risk of loss more precisely. An example of the split classification is 4/4X or 4/4Y. The first number refers to the classification of properties within 5 road miles of a fire station and within 1,000 feet of a creditable water supply. The second number, with either the X or Y designation, applies to properties within 5 road miles of a fire station but beyond 1,000 feet of a creditable water supply. ISO generally assigns Class 10 to properties beyond 5 road miles.
The Elsmere Fire District has a current ISO Rating of 03/3x. Fewer than 5,300 departments nationwide and fewer than 360 departments in New York State have this favorable rating.
ISO’s Public Protection Classification (PPCTM) Program
To help establish appropriate fire insurance premiums for residential and commercial properties, insurance companies need reliable, up-to-date information about a community’s fire-protection services. ISO provides that information through the Public Protection Classification (PPCTM) program.
What is the PPC program?
ISO collects information on municipal fire-protection efforts in communities throughout the United States. In each of those communities, ISO analyzes the relevant data using our Fire Suppression Rating Schedule (FSRS). We then assign a Public Protection Classification from 1 to 10. Class 1 generally represents superior property fire protection, and Class 10 indicates that the area’s fire-suppression program doesn’t meet ISO’s minimum criteria.
By classifying communities’ ability to suppress fires, ISO helps the communities evaluate their public fire-protection services. The program provides an objective, countrywide standard that helps fire departments in planning and budgeting for facilities, equipment, and training. And by securing lower fire insurance premiums for communities with better public protection, the PPC program provides incentives and rewards for communities that choose to improve their firefighting services. ISO has extensive information on more than 44,000 fire-response jurisdictions.
Your community’s rating can result in savings in the form of reduced fire insurance premiums for both residential and commercial property owners. If you own property in the Elsmere Fire District, it might be worth a few minutes to check your property insurance policy to determine if the Elsmere Fire Department is correctly listed as the fire department that protects your property. Check with your insurance agent if you need to correct this information on your policy.
For more information on the Insurance Services Office, click on the following link
Scope of the PPCTM Evaluation
The purpose of an ISO public protection survey is to gather information to determine a PPCTM, which insurers use for underwriting and to calculate premiums for fire insurance.
The Fire Suppression Rating Schedule (FSRS) recognizes fire-protection features only as they relate to suppression of fires in structures. In many communities, fire suppression may be only a small part of the fire department’s overall responsibility. ISO recognizes the dynamic and comprehensive duties of a community’s fire service. However, ISO evaluates only features related to reducing property losses from fire.
How PPCTM Info Affects Individual Insurance Policies
ISO’s PPCTM information plays an important part in the decisions insurers make affecting the availability and price of property insurance. In fact, virtually all U.S. insurance companies — including the largest ones — use PPC information in one or more of the following ways:
to identify opportunities for writing new business
to achieve a reasonable concentration of property risks
to review loss experience in various rating territories
to price policies, offer coverages, and establish deductibles for individual homes and businesses
Insurance companies — not ISO — establish the premiums they charge to policyholders. The methodology a company uses to calculate premiums for property insurance may depend on the company’s fire-loss experience, underwriting guidelines, and marketing strategy. Here are some general guidelines to help you understand the benefits of improved PPC ratings for residents and businesses:
PPC may affect availability and/or pricing for a variety of personal and commercial insurance coverages, including homeowners, mobilehome, fine-arts floaters, and commercial property (including business interruption).
Assuming all other factors are equal, the price of property insurance in a community with a good PPC is lower than in a community with a poor PPC.
The PPCTM Evaluation Process
To determine a community’s Public Protection Classification (PPCTM), ISO conducts a field survey. Expert ISO staff visit the community to observe and evaluate features of the fire-protection systems. Using a manual called the Fire Suppression Rating Schedule (FSRS), ISO objectively evaluates three major areas......
Fire alarm and communications systems
- A review of the fire alarm system accounts for 10% of the total classification. The review focuses on the community’s facilities and support for handling and dispatching fire alarms.
- A review of the fire department accounts for 50% of the total classification. ISO focuses on a fire department’s first-alarm response and initial attack to minimize potential loss. Here, ISO reviews such items as engine companies, ladder or service companies, distribution of fire stations and fire companies, equipment carried on apparatus, pumping capacity, reserve apparatus, department personnel, and training.
- A review of the water-supply system accounts for 40% of the total classification. ISO reviews the water supply a community uses to determine the adequacy for fire-suppression purposes. They also consider hydrant size, type, and installation, as well as the inspection frequency and condition of fire hydrants.
After completing the field survey, ISO analyzes the data and calculates a PPC. The grading then undergoes a quality review. The community will receive a notification letter identifying the new PPC. ISO also provides a hydrant-flow summary sheet, along with the classification details and improvement statements. The classification details summarize each subcategory and indicate the total points the community earned. The improvement statements indicate the performance needed to receive full credit for the specific item in the Schedule, as well as the quantity actually provided.