Fires can be a serious threat to homeowners in every state. In 2019, there were nearly 1.3 million fires in the U.S., resulting in 16,600 injuries. The total losses caused by these fires was $14.8 billion, an increase of more than 74% from 2010. In addition, wildfires have become much more prevalent in recent years due to widespread droughts and the effect that global warming has had on the entire world.

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Because fires can severely damage and even destroy a house, homeowners insurance companies consider the fire preparedness of a community when calculating insurance premiums. To measure the fire readiness of a community, insurers look to ISO ratings, which are determined using factors like the water supply and emergency communication system in a specific area. As such, these variables can have a significant impact on what you pay for homeowners insurance. Here’s what you should know about how ISO ratings can help dictate what you pay for your homeowners insurance.

What is an ISO fire rating?

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 is 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.

An ISO score has the power to affect the insurance premium of every homeowner in the area and can even cause an insurer to deny you coverage in some circumstances.

How an ISO fire rating is determined

The ISO uses the Fire Suppression Rating Schedule (FSRS) to determine community ratings. The FSRS is a manual that lists the most important elements of an area’s fire protection system. There are four categories that account for their scoring model, no matter where in the U.S. your home is located. Each category carries a specific weight and reflects a different aspect of fire prevention.

Once the score is calculated, the ISO assigns a Public Protection Classification (PPC) rating to the community. Below are the categories that account for ISO scores:

50% Fire department: The overall health of a fire department is assessed in this category, based on the number of departments in the area. In addition, the ISO looks at firefighter training, number of firefighters and volunteers, and maintenance and testing of pumps and other crucial equipment.
40% Water supply: ISO evaluates each community based on its water supply. During the rating process, the organization looks at certain factors, like the number of fire hydrants in the area, the amount of water available after daily consumption and whether the community has enough water and water access for fire departments to use for fire suppression.
10% Emergency communications systems: This evaluates how well a fire department receives and responds to emergency calls. Some of the specific factors that contribute to PPC ratings include the number of agents in the emergency call center and the number of computer-aided dispatch (CAD) facilities in the community.
5.5% Community risk reduction: Any extra practices a community develops toward fire prevention and response are recognized in this category. It includes fire safety education, fire prevention techniques and fire investigation (ISO considers these points to be bonus points).

The highest PPC score an area can receive from ISO is a 1 and the lowest is a 10. While the biggest category is the fire department, which accounts for 50% of the score, the hardest to improve is an area’s water supply. A lack of fire hydrants and access to an adequate amount of water cannot be easily remedied and would require extensive infrastructure development to fix.

It is possible your homeowners insurance policy would be denied based on an ISO report, but many companies only use ISO for part of their calculations. Should you be unable to get a policy with one company, you may be able to submit applications to other home insurance providers. Not all carriers will deny you coverage due to your area’s PPC score.

How does an ISO fire rating affect insurance rates?

Fire and lightning accounted for almost 24% of all homeowners insurance losses in 2020, according to the Insurance Information Institute. Between 2016 and 2020, the average fire and lightning claim resulted in $77,340 in insured losses. It is for this reason that insurance companies continue to take fire safety very seriously when calculating a premium, and is why they use ISO scores to determine how at risk your home is.

If your fire department has a strong score from the ISO, this suggests to your insurance provider that the likelihood of your home being destroyed by a fire is low. It could still happen, of course, but the chances are not as high as they could be if you lived somewhere with a poor ISO score.

Homes located in an area that has a poor PPC rating may result in a higher premium to reflect the greater risk companies take on by insuring the home. However, some companies may not even look at ISO scores and instead rely on other data to determine risk.

An ISO score is only one aspect among many that home insurance providers look at. Other factors they consider include such things as:

  • Flood risk
  • Sinkhole risk
  • Earthquake risk
  • Tornado risk
  • Hurricane risk
  • Crime risk

Additionally, each company uses its own pricing algorithm to determine how much a customer will pay for protection. Because there are so many differences between every insurer, homeowners may benefit from comparing quotes from multiple carriers. Each provider is dramatically different in how it underwrites risk factors, especially those revolving around fire.

How do I find my home’s ISO rating?

Your home does not have its own unique ISO fire department rating; the area in which it is located does. This means that you and your immediate neighbors should have the same ISO fire rating.

Further, your area’s ISO rating is only given to your local fire department and insurance companies. It is typically not released publicly unless the fire department decides to announce it. Some fire departments will provide your area’s rating if you give them your ZIP code, but they are not required to do so and may deny your request when you contact them.

If you are unable to determine your area’s ISO score, there are other ways to calculate how at-risk your home is for a fire. You can get an idea by studying the National Interagency Coordination Center’s interactive map of the U.S., or the National Park Service’s interactive wildfire history timeline. Both are quite extensive and informative. While this information may not help improve rates with your home insurer, it may help provide context for choosing a carrier or discussing coverage options.

Key considerations

  • ISO scores are usually not available to the public unless publicized by the fire department.
  • ISO scores reflect an area’s fire rating and are not property-specific.
  • A score of 1 is the highest an area can achieve while a 10 is the lowest.
  • Some insurance companies do not use ISO scores when calculating homeowners’ premiums.
  • Each home insurer uses data received from ISO in a different way, depending upon its underwriting guidelines.
  • If you are denied a policy because of an ISO fire score for your area, you may be approved by a different insurance provider.

Bottom line

As a homeowner, fires are a serious risk to your property, regardless of your location. Unfortunately, you can’t control the fire preparedness of your community and the area’s ISO rating. However, you can take certain steps to protect your home from fire damage.

For example, installing fire sprinklers, switching to a fire-resistant roof, keeping your gutters clean and trimming trees regularly can help reduce the amount of damage that occurs in the event of a fire. In addition, some of these home improvements may also help you qualify for a lower home insurance premium by qualifying you for certain types of discounts.

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