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Collinsville’s improved fire insurance rating could be good for homeowners

COLLINSVILLE – The Collinsville Fire Department has lowered its insurance rating, which could be good news in terms of insurance premium costs for homeowners.

A release from interim City Manager Mitchell Bair said that effective May 1, 2016, the ISO-PPC for areas within the corporate limits of the city was changed from a rating of 4 to 3. ISO is a private firm that provides information to insurance companies regarding property/casualty risk through a number of programs, one of them being the PPC Program. The PPC reviews the fire department, water department and dispatch/communication center capabilities. (The acronym stands for Insurance Services Office, Inc. Public Protection Classification.)

Historically, communities across the country strive to achieve “best in class”, which is generally considered an ISO rating of 1. In 2015 a total of 48,754 fire departments across the country were rated by the ISO. Of those only 4,248 (8.8 percent) achieved an ISO rating of 3 or better (ISO ratings range from Class 1 through Class 10).

The improvement of the city’s ISO rating dates back to 2007 when then-Fire Chief Pete Stehman improved the city’s rating from a 6 to a 4 where it has remained until the current reclassification.

The rating change reflects a commitment of the city and department to training, hydrant testing, and water supply, the city said. The department is striving to improve this rating again from a 3 to a 2 by committing to a capital fleet maintenance program and improved dispatching and emergency vehicle tracking, all efforts which are currently funded and underway.

“The lowered ISO rating is clearly a reflection of the hard work the city has put forth,” Mayor John Miller said. “The Fire Department, Water Department, IT, Dispatch/Communications and city administration all working together to promote a safer environment for our community and its citizens.”

Studies have shown that the results of a change in the PPC Rating from a 4 to a 3 will likely have
up to a 2 percent to 3 percent reduction in insurance premium costs for homes in the affected areas, although this is dependent on each individual insurance company.

Statistical data also demonstrates that the cost of fire insurance claims per $1,000 of insured property is reflective of a communities’ Public Protection Classification Rating, thus clearly demonstrating that communities with better ratings experience lower fire insurance rates and fire insurance claims per $1,000 of insured property.

The increase in fire protection leads to direct economic benefits to Collinsville’s business climate. Interim City Manager Mitchell Bair said that the ISO “…designation means lower fire insurance premiums for businesses, which improves the community’s economic development prospects for retention, attraction and growth.” Bair went on to say that “…the ISO rating is an important incentive to economic development, but is one that that often goes overlooked. It sends the critical message to the development community – both commercially and residentially – that the city is committed to growing and protecting their investment in the city.”

Items for Illinois Business Journal publication may be sent to Editor Dennis Grubaugh,

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