The 'M&Ms' of ISO's Fire Class Rating Systems Explained

BALTIMORE – There’s not much sexy about a discussion on fire insurance rating systems, but the topic is filled with lots of “M&Ms.” And, no, we’re not talking about little hard shelled, multi-colored hard candies.

Insurance Services Office (ISO), has a system for determining the price of fire insurance in a community through a 1 to 10 classification system. Larry Curl, former chief of the Wayne Township (Ind.) Volunteer Fire Department, calls those ISO “M&Ms” myths and misunderstandings.

“When firefighters heard the ISO people are coming, they says ‘why are they coming to our department,’” Curl said. “Why are they bothering us?”

Curl, one of the presenters of a Firehouse Expo class titled “VCOS and ISO, Take a Fresh Look at The New ISO Rating Schedule,” is chairman of the International Association of Fire Chiefs’ (IAFC) Volunteer & Combination Officers Section (VCOS) –ISO committee.

He and Skip Gibson, ISO’s manager of Community Hazard Mitigation, along with several other ISO officials, debunked many of the myths of the rating system and discussed new sections of the rules in a four-hour long presentation in Baltimore on Saturday.

“When ISO comes into look at a fire department, all they are doing is checking to make sure they are providing sufficient and adequate service for the people they protect,” Curl said. “It’s really that simple.”

In a broad overview, Curl said ISO evaluators use National Fire Protection Association (NFPA) guidelines to determine the quality of the service fire departments provide to the community they serve.

Based on a scoring system ISO gives fire departments a numeric score with Class 1 being the best fire department the community could possibly have, down to Class 10 which means there’s not much, if any fire department in the community, Curl said.

With that numeric evaluation, fire insurance providers can set coverage prices for people who live in that community, Curl said, noting that clients in a Class 1 community can expect to pay substantially less than those in the community with a Class 10 rating.

“Most communities want growth,” Curl said. “Let me tell you, business people are looking at that rating. They may not want to risk their $5 million building in a community that has a Class 9 or Class 10 rating. They’ll look elsewhere.”

Curl explained that the burden of having an ISO evaluation shouldn’t be that challenging and he recommended that departments who have asked ISO to come in for a revaluation, “not do one thing” in preparation for the visit.

“We should always be looking to be better prepared to serve our communities,” Curl said. “Those we serve deserve the best protection we can provide every day.”

That’s not to say that fire departments shouldn’t strive to improve their scores and ask ISO to come back for a second look after they get their department’s up to snuff.

Another myth that some fire services leaders believe is that their department will have to buy lots of new stuff to comply with ISO recommendations.

“You shouldn’t have to buy a thing,” Curl said, once again subscribing to the theory that fire departments should always be prepared to serve.

However, if the apparatus is old and worn out, and the turnout gear and personal protective equipment (PPE) needs to be replaced, Curl said the department should not expect full scores for those aspects of the evaluation.

Curl said when a department doesn’t do well on their ISO ratings, the department can always work on improving the equipment, procedures and ask for another revaluation after the improvements are made.
Curl said sometimes a poor rating is sufficient to persuade communities to provide more resources for fire departments, Curl said. When people realize the savings they can incur through their ISO ratings, they’re often eager to bolster the fire departments.

“The results of your work is what really counts,” Curl said. “It’s not about ISO. It’s about the service you provide to your communities.”

Curl explained that 50 percent of the score comes from examinations of fire department training, equipment, locations and a myriad of other elements controlled by the fire department.

Forty percent of the score is derived from the water supply system in a community, even those without hydrants and only static water supplies, Curl said. And Gibson, the ISO manager, said it is possible for departments without hydrants to get full credit for water supply provided they are able to deliver adequate water flows from other sources.

The final 10 percent comes from the communications system, Curl said, adding that it’s often a function of the county or other department. ISO evaluators will check out the services dispatch provide and assign a grade accordingly which is then all factored into an algorithm Curl said.

“Don’t think they’re out just to get you,” Curl said. “They’ll work with you. They’ll give you help. And at the end of the day, what you do, or don’t do, will show.”

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