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October 18, 2011

Study: Improved Fire Protection Could Mean Insurance Savings for Oklahoma Homeowners

2 min read

Topic: Insurance Sales Insurance Agency Management Insurance Agency Growth Strategies

firefighters_blaze If Oklahoma communities improve fire protection services it could result in major savings on homeowners’ policies for local families, according to presenters at a recent legislative study.

“There are some very basic things that communities can do to improve their fire suppression rating, which would also improve the cost of homeowners’ insurance,” said state Rep. Joe Dorman, D-Rush Springs. “Too many Oklahoma communities are currently rated poorly and there is much room for improvement.”

ISO, a private entity in the insurance field, provides insurers with statistical, actuarial, underwriting, and claims information. The company’s work includes assessments of fire suppression capabilities in local communities, ranking them from “1” to “10” from best to worst.

Members of the House Insurance Committee recently met to determine how Oklahoma towns could improve fire department ISO public protection classifications.

“ISO ratings are tied mostly to fire departments,” Dorman said. “If you have an excellent fire department, a good emergency communications system and good access to water, that greatly improves your ISO rating and reduces the cost of your property insurance. In fact, homeowners can save up to about 10 percent for every level of improvement on the ISO rating.”

For a $100,000 home, the difference between an ISO rating of “3” and “10” is as much as $900 in insurance costs per year, Dorman noted.

Unfortunately, lawmakers learned that Oklahoma has the highest percentage of communities ranked “10” in the nation.

“We certainly need to do something to improve that,” Dorman said. “The good news is that even basic infrastructure improvements can generate significant savings in those communities. The addition of a fire truck or purchase of additional communication equipment can improve your ISO rating.”

The community of Fletcher was recently able to significantly improve its ISO rating by implementing similar improvements, Dorman noted. Fletcher Fire Chief Stanley Miller testified to the committee that the community improved from an ISO rating of 8 to a 6. Fletcher residents should contact their insurance company to see if the improved ratings in the community will result in a savings on their policy, Dorman said.

“If we can encourage more communities to put in better water lines, improve their communication systems, or increase the number of trained firefighters,” Dorman said, “it’s going to provide a huge return to homeowners.”

Source: Oklahoma House of Representatives