How Do Homeowner Insurance Companies Rate Our Policy For Fire Protection
98% of them use the Public Protection Classification (PPC) system
What is the Public Protection Classification (PPC) system?
It is the countrywide classification system used by the Insurance Services Office (ISO) to reflect a community’s local fire protection for property insurance rating purposes. The public fire protection of a city, town or area is graded using ISO’s Fire Suppression Rating Schedule to develop the community’s classification.
Where is the PPC system used?
The PPC system in some form is used in all 50 states.
What is ISO?
ISO is a New York-based advisory organization that serves the property and casualty insurance industry by providing inspection services, insurance coverage form development and statistical services.
How does the PPC system grade local fire protection?
ISO classifies communities from 1 (the best) to 10 (the worst) based on how well they score on the ISO Fire Suppression Rating Schedule, which grades such features as water distribution, fire department equipment and manpower and fire alarm facilities. ISO field representatives use the schedule when surveying a community’s fire protection capability. The score that is determined from applying the Fire Suppression Rating Schedule is translated into a public protection classification.
How does a community’s score translate into a PPC rating?
The following table shows the number of points required for each PPC Class:
Points Required for Each PPC Class
|2||80 to 89.99|
|3||70 to 79.99|
|4||60 to 69.99|
|5||50 to 59.99|
|6||40 to 49.99|
|7||30 to 39.99|
|8||20 to 29.99|
|9||10 to 19.99|
|10||0 to 9.99|
What does a dual PPC like 7/9 mean?
The first number is the PPC for buildings within 1,000 feet of a fire hydrant and five road miles of a recognized fire station. The second number is for buildings more than 1,000 feet from a fire hydrant but within five road miles of a recognized fire station.
Does ISO automatically penalize communities for having volunteer fire departments?
What does the PPC system mean to me?
Every city, town or area that provides fire protection services is subject to being graded to establish a PPC. Individual buildings — including your house — are subject to the community’s PPC. When calculating property insurance premiums, insurance companies using the PPC apply a factor that reflects a particular community’s PPC.
Do PPC ratings vary from company to company?
Yes, it can, because some insurance companies do not use ISO.
Does my community’s Public Protection Classification significantly affect my homeowners’ insurance premium?
Although homeowners’ insurance rates are driven mainly by your area’s claim experience, your community’s PPC rating also is important. The premium on a brick veneer house is 39 percent higher in an area rated 10 (worst) than in one rated 1 (best). (This range is even greater for frame houses.) A brick veneer home’s rate difference from one class to the next ranges from 1.5 percent to 9 percent.
Asbestos Clad and Stucco Percentage Change from Current PPC to Other PPC.
Brick Percentage Change from Current PPC to Other PPC.
Brick Veneer Percentage Change from Current PPC to Other PPC.
Wood Frame Percentage Change from Current PPC to Other PPC.
What about homes in remote locations?
Any building more than five road miles from a fire station or outside the boundary of a fire protection area, such as a city or volunteer fire department service area is rated 10. An exception is an area that has an “automatic aid agreement” with a recognized and rated fire department to respond to fires in that area. In such cases, ISO assigns the area a rating after evaluating the agreement. Use of the assigned rating will depend on the distance of individual buildings from fire stations.
How can my community get a better PPC rating?
By asking ISO for a re-evaluation based on improvements since last inspection. If your community has never been inspected, it needs to start by returning ISO’s questionnaire if it has not already done so. City officials can make inquiries by calling ISO Customer Service, 1-800-444-4554
If my town makes improvements and seeks a re-evaluation, how soon will the improvements affect my homeowners’ insurance rate?
ISO publishes evaluations quarterly. For several reasons, including the fact that homeowners policies are written for a year at a time, it may take a year or longer for a re-evaluation to affect an individual homeowner’s premium.