Why the Quality of Your Fire Department Matters Even if you Never Have a Fire

Posted on October 22, 2013


Home insurance premiums can double or even triple based largely on how well your firemen do their jobs.

Lila has had occasion recently to look into home insurance policies.  While doing some cost comparing, the conversation with the agent turned up a little fact that I was previously unaware of:  not only do insurance companies want to know how far you are from a hydrant and from a fire department, but  they also base your premiums on the quality of that department, or more accurately, the protection they think you can get from that department.  It’s not good enough just to have a fire department; it has to be a good one, as judged by some mysterious Powers That Be.  Bear with me now as we plow through a haze of acronyms to see how this works.

Okay, so there’s this for-profit company called the Insurance Service Office (ISO).  They make their money by selling analytical data to insurers on all kinds of risks, from driving to flooding to earthquakes to… well, fire.

The ISO measures a community’s overall fire risk using their trademarked “Public Protection Classification Service” (PPC).  The grading system for your community and the local fire department is summed up in their “Fire Suppression Rating Schedule” (FSRS).  Basically, just like a college course, the grade is broken down into segments:  10% from the alarm and dispatch system; 40% from the availability of a water supply; and 50% on the fire departments themselves: the number of them, their distribution in the community, their training, their equipment, their response records, and so on.  The final “grade” is the PPC, which is a number from 1 to 10:  1 is the best, and 10 means there is “no recognized protection.”  Ouch.

The PPC is not the be-all, end-all in determining your insurance premiums when it comes to fire protection.  It’s just one factor in your insurance company’s calculations of your particular risk.  Your home’s age and materials, whether you have smoke detectors or a fire monitoring service like ADT, or whether you keep fire extinguishers on hand, can all affect your insurance risk.  But the impact of the PPC is enormous.  For instance, in Fayette County, Georgia, home insurance premiums suddenly doubled and even tripled when the PPC was dropped to a “10” rating.

When you think about it, it is not unreasonable to grade community protection services this way (so long as they do it accurately, which they don’t always).  When I was in my early teens, I was staying overnight with a friend, who lived in a 19th-century farmhouse out in the sticks.  As I went traipsing through the dining room, my eye caught the image of a flame in the window, and my brain unthinkingly registered it as a reflection from the fire in the fireplace.  But wait… there was no fire in the fireplace!  I looked again.  What I had taken to be the reflection of a foot-high flame from the cold, dark fireplace was actually dozens of feet high and far away, where no flame should have been:  there was a house on fire around a bend in the river!  My friend’s father was a doctor, and we barreled over there in case anyone might be hurt.  Thankfully, no one was, but I became witness to the complete and utter destruction of that house while the local fire department showed up belatedly, then realized there was no water in their tanks, then went hunting for a place to back up to the river to fill them, all while white-hot flames raged so brightly that you couldn’t even see the framework of the house, and downed electrical wires sparked and slithered in the yard.  By the time the fire truck came back, all they could do was saturate the ashes.

That sort of total loss is the insurance companies’ nightmare, and they are in the business of managing risk, after all, so I can well understand why many of them rely on the PPC to set their premiums.   Take some heart that even if your community has a bad PPC, your situation might not be quite so dire in reality.  Still, though… you might want to stock up on fire extinguishers and escape ladders.

And if you are soon to move to a new neighborhood, ask your insurance company about the PPC rating. You might save some big bucks in the long run.