1. #1
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    Default I.S.O. Grading Schedule

    We are starting to do some of the paperwork for a spring of 2005 I.S.O. review. In talking with a State Farm agent, I was informed they no longer use the I.S.O. grading schedule to determine fire insurance premiums for their customers,in making a few phone calls, I found only a few insurance companies that are using the I.S.O. grading schedule to determine their fire insurance premiums, some are using zip codes, and others just group you into an area. Makes me wonder if it is worth the trouble to improve our grade, if the taxpaying home owner is not going to get any benefit from it. Any thoughts on this ?

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    Correct me if I'm wrong, but I believe homeowners do not see a drastic change in their rates anyways. The commercial businesses are the ones who see the big changes........

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    Originally posted by firenresq77
    Correct me if I'm wrong, but I believe homeowners do not see a drastic change in their rates anyways. The commercial businesses are the ones who see the big changes........
    You are right in that businesses REALLY see the difference in ISO ratings as as far as I have found all insurance companies writing commercial policies use ISO. Additionally in most states/communities who is paying the property taxes that pay for fire depts and make the generous contributions to our fund raisers? It isn't homeowners.

    Very difficult to get a good answer info for home insurance. Local insurance agent (a salesman) can't help you. They stick property info and zip code into a computer and get a rate. They can not "what if" various ISO rating. Of course every insurance agent will claim to understand ISO and many claim to be an expert on ISO. You can not get ahold of the "experts" as the Underwriters who "own" the policy sold by an insurance company thru your local agent. I've tried. We are working on an ISO improvement project and part of such an engineeing problem is evaluation the payback.

    The requirements of various state law/regulation control usage of ISO from area to area. Various insurance co (or their underwriters) have different tiers into which they lump the ISO scores, standards for distance from station/hydrant (vs. ISO standards of distance). Texas, CA, among others have extensive regulation. In Iowa very little however the insurance companies that use ISO to set rates in the rural areas are twice as high as the rates at mutual insurance companies (which do not use ISO at all).

    Only way I found to answer the question was to have identical house "I going to build this house at ____ zip code or ____ zip code". Doesn't not solve for all variables but pretty good. Building my typical residental house my town (ISO 9) vs in town 20mi away (ISO 5) result in an increase in total policy price of approx 49%. Just from the change in fire insurance cost (most expensive part of policy). There certainly are relative changes between the two policies due to loss experience due to criminal activity, liability suits etc. But answer is good enough for my purposes. 1/2 is pretty dang significant.

    Would be very interesting to construct a couple of "standard" houses for test quoting across the country. I would certainly be interested in what you find.

    Draft a list of features of a typical new construction home in your community (I think to many additional variables with an existing house). 3 bed, 2bath, frame const, no brick, no fireplace, etc etc etc). Call your insurance agent or various agent and get quotes for 2 communites that have know ISO ratings. Make sure you give them the same info each time so take notes.

    If www.isoslayer.com is still up good info there.

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    Dropping from unrated, or FP Class 10 to FP Class 6 saved me over $200 per year on my homeowners insurance. My insurance company uses ISO to base the fire insurance premium costs. I would rather keep that money every year, than give it to them.
    Last edited by AC1503; 08-26-2004 at 12:18 AM.

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    Cool Different...............

    Here in Maryland, ISO rates the entire County. We are a class 4, and I do not expect to see any changes coming along anytime soon. And, we really don't care either. We know that we do a good job. Our customers know that we do a good job. No one else matters.
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    Originally posted by AC1503
    Dropping from unrated, or FP Class 10 to FP Class 6 saved me over $200 per year on my homeowners insurance. My insurance company uses ISO to base the fire insurance premium costs. I would rather keep that money every year, than give it to them.
    I agree, $200 is a decent amount to drop, but I don't think most places drop 4 in ISO rating from 1 review to the next.....

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    Your residental rates will see a difference in there premiums by dropping as low as a 6. From there on down is where you save on commerical rates.

    This is what I found out when I starte doing some research several months back. Also, the majority of out insurance companies around here do use ISO. We are currently at a 7 and could possible go to a 4 with minor improvements.

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    Some,Not all insurance co.s refuse to insure a house if the ISO is a 10.
    Stay Safe ~ The Dragon Still Bites!

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    Default Watch what you wish for!!

    We were looking to reduce ours from a 6 to a 5 or 4 and I was told yesterday by 2 different ins. co's. that if we go to a class 4 the residential rates in our area would INCREASE by 4.5%. I was told that a normally lower ISO rating means a higher Property Protection Class because usually your larger cities have a lower class and more crime and vandalisim. Also both co's ran the same house at the different class's. The difference between 6 and 5 was $0 and between 6 and 4 was plus 4.5%. Go figure.

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