The Basis For Your Home Owners Fire Insurance Cost: Insurance Service Office Rating Process

Have you ever wondered what is the prime factor is determining the cost of your home owner's insurance cost? Within the state of Illinois, an insurance organization audits fire protection services for areas and the outcome of the audits are used to assign premium rates. The Insurance Service Office (ISO) Commercial Risk Services, Inc. regularly performs town grading surveys in all communities and areas which have public fire protection. The fire suppression rating schedule (FSRS) is utilized by the ISO/CRS, Inc. in the grading survey process.

The Fire Suppression Rating Schedule (FSRS) is adopted and used in 47 states, including Illinois, as an objective analysis of fire suppression features in a municipality, measuring major differences between cities and recognizing the suppression potential of those cities to handle buildings once they are burning. The entire thrust is to quantify, on a relative scale of 1 through 10 (the lower the rating, the lower the insurance premium rates), the capabilities of a community to control these fires, and thus limit the resulting loss. The FSRS is intended to credit any system, equipment, apparatus, or personnel level that is brought to bear on the suppression problem.

Credit is allocated through the review and evaluation of three major features - Fire Alarm, Fire Department, and Water Supply. The review of the Fire Alarm system, worth 10% of the total grading, places emphasis on the performance of handling and dispatching fire alarms. The review of the Fire Department, worth 50% of the total grading, concerns itself with the fire department's first alarm response because of the importance of the initial attack to minimize potential loss. Items include the review of existing pumping apparatus and ladder trucks, the distribution of fire stations and apparatus, equipment carried on apparatus, pumping capacity, department manning levels and training. The water supply review, worth 40% of the total grading, considers the actual water supply that is available for fire suppression at representative locations throughout the city.

The fire suppression rating schedule is important to city leaders and individual residents because the public protection for a given city affects fire insurance premiums paid by both commercial property owners and residential property owners. For example a change from a Class 7 to Class 6 rating would provide an average insurance premium decrease of 5%. A change from a Class 6 to Class 5 rating would provide an additional insurance premium decrease of 5%. Remember, many items in the grading schedule relate to management policy relative to fire alarms, the fire department and water supply. Sound management practices can earn credits just the same as purchasing equipment.

Countrywide, there are over 40,000 graded communities by the ISO, of which only 411 are Class 1. In Illinois, there are 1,500 graded communities of which only 23 are Class 1 and 77 departments are Class 2. Currently the Staunton Fire Protection District is one of 17 departments rated a Class 3. The Staunton Fire Protection District has the distinction of having the lowest ISO rating in Macoupin County. Staunton Fire Protection District members are always working on other projects that will help lower the rating even further. If you or your organization would like to find out more about the insurance rating process, and how you could possibly help in lowering the rating, contact a member of the Staunton Fire Protection District.