Pcinspector1 said:
ISO was here before the code change. We went from the 2006 to the 2012. City's have the right to adopt and implement codes as they feel prudent.The ISO wanted to raise our residential class, the problem was we had no new subdivisions and no additional threats to the existing housing stock other than age.
Fire protection actually became improved between code years.
Why does the ISO want to increase a city's rating when that city has stagnant residential housing growth?
Increase Insurance premiums?
This state does not have an adopted building code like California.
ISO ratings have very little, if any, effect on insurance premium rates in most states.
As of 2001 State Farm has abandoned the use of ISO in Illinois, Texas, Oklahoma, Pennsylvania, Arizona, Minnesota, Nevada, New Mexico, Vermont, and Wisconsin in favor of the Subzone Rating Factor System. They have plans to do so in other states.
Other Insurance companies are following suit
In some states the insurance companies can use a host of other factors to determine your insurance premium. Some companies will place a great deal of influence on your credit score. (Another reason to improve your score as much as possible.)
Keep something in mind as you consider the effect of ISO in your area. Insurance is something often highly regulated by individual states. While State Farm has abandoned the use of the ISO, Public Protection Classification (PPC) rating in many states, they may not be allowed to do so in others. A few states have successfully stopped State Farm from implementing the new system. (i.e. Louisiana and North Carolina) A few others have tried to fight State Farm's desire to change. (Arkansas) The state of Georgia requires all insurance agencies to consider ISO ratings in setting premium rates.
In many cases it is the fire associations or fire chiefs who are fighting this change. The perception might be that dropping the use of ISO ratings system hurts fire departments. Many departments, especially rural ones, use the structure of the ISO rating system as a way to justify resources in budget discussions. ISO rates everything from the amount of fire apparatus to the age of it. You can get points for very specific types of training equipment. Examples of this would be "cut-away" fire hydrants or pumps. Just about everything a fire department has, or does, is evaluated. Fire departments fear, that without ISO's influence, convincing cities to buy equipment, or hire personnel, will be harder.
But some chiefs believe that no longer depending upon ISO has made their job easier. They are now better able to paint a picture where more people or better equipment translates into lower fire loss. How well the fire department performs, which can be related to how well it is equipped, staffed and trained, directly affects insurance rates. Lower insurance rates could also mean more people and industry* might move to a city. Many city councils can now be made to see a value in having a good fire department. Fire prevention programs and better code enforcement can be an easier sell also.
*Note: In some states ISO ratings might still be used to calculate commercial insurance rates while zip code loss, or the "subzone" system is used for homeowners.
There are many states where ISO is still the predominant factor in setting insurance rates. But even in states where ISO is no longer used, many fire departments have continued to gauge their success by their ISO ratings. They often boast that an improvement in ISO / PPC rating will translate into a certain percentage rate of savings for the homeowner. Perhaps they just like having a yardstick by which to measure their success. Some may see it as bragging rights. But apparently, some may not know that this change has taken place. ISO is not spending time and money to let people know where the value or their services have been diminished. (Who would?) While it is possible that some insurance company might still use ISO in any state, it is not likely that even a majority, of homeowners, will see a reduction in premiums in a state listed above, if a rating is improved. You can find many fire departments, in the states mentioned above, who say on their website, that a better ISO rating = lower insurance rates. Some declare it emphatically. "...this means an approximate 14% reduction in homeowner’s insurance premiums" Others might just imply it. They may say something like, "...is recognized when home insurance rates are determined."
