Last week I had a relative call me in hysterics! He had gotten notice that his mortgage payment was going up an extra $404.00 PER MONTH…. Yes, per month. My first questions were do you have a variable mortgage rate. Nope. He has a fixed rate. So, why did his payment go up?
He found out the next day that the increase in his mortgage payment had nothing to do with the mortgage loan at all. It turned out that his escrow payment increased due to two reasons.
The first reason he said was that his property taxes increased a whopping 15% due to, yes, you guessed it, inflation. His home’s value was evaluated by the county auditor’s office at more than 2 times what it was actually appraised a few years earlier. Inflation.
In addition to the auditor’s office nightmare, his homeowner’s premium drastically went up.
When he investigated this, his insurance company told him it was partially due because of inflation (the cost of rebulbing materials, etc. has drastically increased ), but also affecting his premium was his local fire department’s ISO score.
So, what is an ISO score?
An ISO fire rating is a score provided to fire departments and insurance companies by the Insurance Services Office. The score reflects how prepared a community and area are for fires. While it mainly focuses on the local fire departments and water supply, there are other factors that contribute to an area’s score.
So exactly how is an ISO rate determined?
The ISO has 4 categories that account for its scoring model. Each one carries a specific weight and reflects a different aspect of fire prevention. The first one that accounts for 50% of the rating score is the actual fire department itself. The overall health of a fire department is accessed in this category. Accessed are the training, the number of employees or volunteers they have, and maintenance and testing of crucial equipment used in firefighting.
The next category that accounts for 40% of the score is water supply. Does your community have enough water and water access for fire departments to use for firefighting? How many hydrants are there? Are they in working order? How much water is available after daily consumption? These all go into effect when developing the ISO score.
Accounting for 10% of your ISO score is your emergency communications system evaluation. This tells them how well a fire department receives and responds to emergency calls. If you depend on a volunteer department, the lack of volunteers can really hurt this rating, especially when most volunteers may be working when an emergency happens.
And finishing last at 5.5 % of the rating number is the community risk. This is any extra practice that a fire department does such as fire safety programs and education, fire prevention techniques, and fire investigations. These are all considered bonus points that can help the ISO rating.
The highest score an area can receive from an ISO is 1. The lowest is a 10. While the highest score a department can receive is the fire department category (50% of the score) the hardest one to improve is the area’s water supply. The lack of fire hydrants and access to an adequate amount of water can’t be remedied easily and would require extensive infrastructure development to correct.
It is possible that your homeowner’s insurance policy would be denied based on an ISO report, or premium rates would skyrocket, but many companies only use ISO for part of their calculations. If you are unable to get a policy with one company, you may be able to submit applications with another provider. This is where Citywide Insurance comes in.
At Citywide Insurance, we pride ourselves on being able to represent many different Homeowners Insurance companies and we will try our very best to help you with any of your homeowner’s insurance issues. Let us try to help you! Give us a call and speak with one of our many knowledgeable employees!