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Here’s The Scoop….ISO Workshop Today!…


A “class” to explain the ISO and how it works ….determining the rating for LBTS and the VFD….


‘This material is provided as general information and is not a substitute for legal advice.
Consult your attorney for advice concerning specific situations.
The Insurance Services Office, Inc. (ISO) has for many years done evaluations and ratings of the
fire protection provided in communities. This system is called the ISO Public Protection
Classification program, or PPC. The PPC process grades a community’s fire protection on a scale
of 1-10, based on ISO’s Fire Suppression Rating Schedule.
Many insurance companies use ISO’s PPC evaluations as a factor in setting the premiums they
charge for property insurance; the better the community’s PPC grade, the lower the premiums the
insurance company would charge for property insurance in that community. ISO’s data on fire
losses indicates that communities with better fire protection as evaluated by the PPC do in fact
tend to have lower losses from fire damage than other communities.
This memo gives an overview of the factors that affect a community’s PPC rating, how these
ratings affect insurance premiums, how the city can have its rating reviewed, and where the city
can get more information on the ISO PPC process.
What factors are the PPC ratings based on?
ISO’s PPC system has been in use since the early 1900’s, and has been continuously modified and
refined over that time. The Fire Suppression Rating Schedule (FSRS) looks at a great deal of
specific information about the fire department, the water supply, and the types of property in the
community, and uses a fairly complex process to evaluate that information. In general though,
here are the factors the PPC system looks at.
• Water supply is the most important single
factor, and accounts for 40% of the total
rating. The FSRS compares the water supply
available at representative areas of the
community with the amount needed to fight a
fire in the types of buildings there are at that
location. In addition, there are some specific
minimum requirements for specific classes;
to be Class 8 or higher, for example, the city
must have the water supply and equipment to
deliver at least 250 gallons per minute for at
least two hours.

• Fire equipment accounts for 26% of the rating. Again, there are both some specific minimum
equipment requirements, and additional equipment standards based on the numbers and types
of structures in the community. Regular testing of the equipment is also a factor.
(Incidentally, the ISO rating system does not have a maximum age for fire trucks, but instead
focuses on the equipment’s capabilities. If the 1949 pumper is tested regularly and meets
performance requirements, it’s as good as a brand new truck as far as ISO is concerned.)
• Personnel accounts for 24% of the rating. 15% of that is based on the numbers of firefighters
available for the initial response and how quickly the firefighters can respond. The other 9%
reflects the initial and ongoing training the firefighters receive.
• The alarm and paging system accounts for the remaining 10% of the rating.
When ISO rates a community’s fire protection, they will prepare a “Classification Detail Report”
which shows in detail how much credit the city received in the rating process for each item
reviewed, compared to the maximum credit possible for that item. ISO will also prepare an
“Improvement Statement” which identifies what changes a city would need to make in order to
move up to a particular grade. To get a copy of these reports, the fire chief needs to request them
from ISO in writing on official letterhead.
Re-rating the city’s fire protection
ISO will periodically send the city a “Community Outreach Questionnaire”, asking for information
about the city’s fire protection system. If the city completes and returns the questionnaire, ISO
will check for significant changes in the city’s fire protection system that might merit a review of
the city’s current classification.
Changes in the area served, improvements in the city’s water system improvements, additional fire
stations constructed, new equipment added, improvements in the city’s alarm and paging system,
etc., are some of the items most likely to trigger a review. If the city has made improvements in
any of these areas, it may be worthwhile to contact ISO to request a survey. The city can also
download a copy of the Community Outreach Questionnaire from ISO’s web site, complete the
survey, and return it to ISO to get the process started

How do ISO PPC ratings affect
insurance premiums?
The table to the right shows how the
premiums would vary for some
typical structures under a couple of
insurance companies’ current rating
schedules. Keep in mind though that
every insurance company sets its
own rates. While these figures are
reasonably representative of how
much difference the fire rating can
make in an insurance buyer’s
premiums, the amounts and
percentages of the premium credits
for the various fire classes will vary
among insurance companies.
Here are some points to note:
• In this schedule, no additional credit is given on residential property for a fire class better than
7. The reason has largely to do with the role that water supply plays in the ratings. Having a
better water supply helps in fighting fires in larger commercial structures, and therefore is
reflected in a better rating. But for most residential fires a lesser water supply is actually
needed, and having more than that available really doesn’t help the fire department fight that
particular residential fire any better. There’s some variation among insurance companies (e.g.,
some might allow additional credit for class 6, others might lump classes 7 and 8 together for
rating purposes, etc.) but this general pattern is fairly typical for residential premium structures.
• Not all insurance companies use the ISO PPC classifications. This is especially true for
residential coverage. Some companies have their own rating systems based on their own
historical loss data for the area rather than on an evaluation of the fire protection in the area.
Other insurance companies use their own systems for rating the fire protection for a particular
property; a company might classify properties based on the individual property’s distance from
a fire station and water supply, for example.
LMCIT also uses the ISO PPC ratings as a factor in determining premiums for coverage on the
city’s own buildings.
Improving the city’s ISO PPC rating will likely have the biggest impact on citizens’ insurance
costs if your city is in one of two situations:
• The city is currently in one of the lowest ISO PPC classes; or
• The city has a significant amount of commercial or industrial property.

For additional information
ISO’s website offers a great deal of useful and well-organized
information on the Public Protection Classification system and the Fire Suppression Rating
Schedule. You can also download a copy of ISO’s Community Outreach Questionnaire from this


Look at management ………..

Overview to follow…..
more to come……..

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