Fire Departments' Ratings Sway Insurance Costs

By Rusty Surette, NEWS 9

Fire departments can save a house if it's on fire, but they can also help save homeowners money on insurance.

Leann Cobb's homeowner's insurance is low, due to the Insurance Service Office rating, or ISO rating.

The ISO rating is like a report card for a local fire department, ranging from 1, which is the best, to 10, which is the worst rating.

Insurance companies use ISO ratings as a factor in calculating premiums for homeowner insurance, and the better the rating, the cheaper the premium.

"If the fire department can respond quickly, get the water on the thing with good pressure, adequate personnel there to keep the flames put out, then they'll more than likely to keep their cost down for insurance," said independent insurance agent Dan Ramsey.

Midwest City, which was put to the ultimate test with recent wildfires, is the only fire department in the state with a rating of 1.

"We got our Class 1 in 2005 and it took us twice to get it," said David Richardson of the Midwest City Fire Department.

Insurance Service Office considers the follow aspects when calculating a rating:

• 50 percent is based on the fire department
• 25 percent is based on the city's water system
• 25 percent comes from the city's communication and 911 systems

"It takes a lot of building," Richardson said. "You can't just go from a Class 5 to Class 1 without building upon building in the community."

Thirty percent of a homeowner's insurance policy comes from ISO ratings.

Oklahoma City Fire Department will not ask for another ISO inspection. Instead, it's considering spending thousands of dollars on IFCAS, a different classification system.

"I think it better evaluated the department and our capabilities and helps set goals when we go through that process," said Oklahoma City Fire Chief Kellie Lee.

Although the department is considering a different rating system, it will not change the ISO rating.

"I would encourage communities to support those fire departments because it keeps the insurance costs down," Ramsey said.

Most insurance companies use the ISO rating system when setting their rates, but it's important for homeowners to be aware of the rating system used by their insurance companies.