11. ISO Rating ReportAgenda -February 10, 1997
AGENDA ITEM 11 - ISO RATING REPORT
INFORMATION ONLY: No action needed. There have been several
questions/comments about our current fire insurance rating. A few
months ago, I asked the Fire Department to get information for us
to review. The Chief and other officers have made inquires and
attended a class specific to this subject. I have enclosed some
comparisons to other City ratings, classification details, and
improvement statements issued in 1993.
{ To provide information on the history and the myths surrounding the
Insurance Services Office.
To provide information on insurance premium calculations, the ISO's
affects on individual premiums and the ISO's affects on a jurisdiction's total
premiums paid.
To provide detailed information on the ISO's Fire Suppression Rating
Schedule used to establish a Public Protection Classification (Rating) for a
jurisdiction.
DISCLAIMER:
It is not the intent of ISO or this presentation to provide a guide for life
safety or loss prevention purposes.
Purchases, manpower and standard operating procedures are a local
decision determined by local conditions. Any effort to improve a
community's ISO Rating will require a long term effort and planning.
The Fire Suppression Rating Schedule should not be used as a guide for
day-to-day fire department operations.
WHO IS ISO?
The Insurance Services Office is an independent organization funded by
user fees from the property and causality insurers that use those services.
Over 99% of the insurance companies use some or all of the services
offered by ISO.
An ISO survey focuses on Property Conservation as opposed to the Life
Safety focus of a fire service inspector.
It's important to remember that ISO has no regulatory authority. ISO simply
surveys the property and reports to the insurer who has requested the
underwriting information.
Clarence Krepps, City Manager
Doug Rauthe, Honorable Mayor
City Council Members
Our figures for I. S. O. Ratings have ben calculated in the
following manner. We used $200.00.00 for the average business in
the city, and $100,000.00 as the value on the average residence.
We also used actual average insurance quotes for the two types of
insurance coverage. We realize that it is impossible to give an
exact quote on different types of businessHs due to the varying
types of exposures, building construction, heating plants, etc.
,- Insurance costs on frame construction buildings are roughly
double the cost over masonry construction.
CLASS 10 RATIRG
$200,000.00'Insurance on: '
Frame Construction - $3,600.00 yearly
Masonry Construction - $1,887.00 yearly
These are based on average figures.
CLASS 5 RATTj ,
$200,000.00 Insurance on:
Frame Construction $2,156.00 yearly
Masonry Construction $1,045.00 yearly
Average:$1,602.00
-2
$200,000.00 Insurance on:
Frame Construction $1,827.00
Masonry Construction $ 958.00
Average: $1,372.00
The insurable value of the city was based on the taxable value of
the city taken from county tax records. Insurable value is a
debatable figure, due to the fact that there are several methods
used to calculate insurable value. We used the most conservative
method, to avoid any overstatement of savings, on insurance, and
possible errors through the use of average figures.
Orland Leland
Assistant Fire Chief
9• rk•
Class 10
= Less than 10 points
Class
9
= 10.00 to 19.99 points
Class
8
= 20.00 to 29.99 points
Class
7
= 30.00 to 39.99 points
Class
6
- 40.00 to 49.99 points
Class
5
= 50.00 to 59.99 points
Class
4
= 60.00 to 69.99 points
Class
3
= 70.00 to 79.99 points
Class
2
80.00 to 89.99 points
Class
1
= 90.00 or more
Receiving and Handling Alarms
Fire Department
Water Supply
Divergence
Total Points Possible
3
10 points
�* 45 to 65 points
40 points
(deduct)
95 to 115 points
ISO CLASS AFFECTS ON INSURANCE PREMIUMS (Estimates)
If Class 10 pays $1.00 for insurance:
-'lass 9
pays
.93
7%
savings
from
Class
10
Class 8
pays
.72
28&
savings
from
Class
10
Class 7
pays
.68
32%
savings
from
Class
10
Class 6
pays
.65
35%
savings
from
Class
10
Class 5
pays
.63
37%
savings
from
Class
10
Class 4
pays
.60
40*
savings
from
Class
10
Class 3
pays
.58
42%
savings
from
Class
10
Class 2
pays
.55
45%
savings
from
Class
10
Class 1
pays
.53
47%
savings
from
Class
10
Most insurance
companies offer
only
very
small
discounts
on residential
policies
in Class
6 or better
cities.
Each insurer
sets its own rates
and most
will vary
from the
above
percentages.
TYPICAL
INSURANCE PREMIUMS
BASED ON INSURABLE VALUE.
nsurable Value
BUSINESS ,
of your Community:
RESTDENTIAL
TOTAL
$600, 000,
Premium
000 . 00
J$1 , 053, 338,
01 0. 00
$1,
10:
65%38,,
10
.00
4
community @
Class
on your
$_2,743,000:00
$ 5,772,084.00
$
8.515.084.00
Premium on your community at Class 5:
$ 1.,602,000.00 $ 3,6861,550.00 $_5,288.550.00
Premium on your community at Class 4:
$11,392,000.00 ,$ 3,454,824.00 $ 41,846,824.00
Savings to your community{where we are now),$ 3,226,,35 4,00
Fire Department Budget ??? $ 864.018.00
Savings from Class 10 to Class 5 J$ 24743.000.00-
avings from Class 5 to Class 4 _,$ 441,726.00�
Savings from Class 10 to class 4 ,$ 30668.260.00
Apri125, 1996
Rating Service:
Great Falls
ISO Commercial Risk Sevices
1355 So. Colorado Blvd.
Suite 306
Denver, CO 80222
1-900-759-3512
Cities and their protection class
Protection Class 2
Protection Class 3
Billings Libby
Protection Class 4
Bozeman Lewistown Livingston Missoula
Sidney
Protection Class 5
Baker
Big Timber
Butte
Bridger
Coram
Columbia Falls
Cut Bank
Evergreen
Ft. Smith
Glascow
Glendive
Hamilton
Harrison
Helena
Havre
Joliet
Kalispell
Miles City
Malstrom
Polson
Red Lodge
Round UP
Scoby
Shelby
Sheridan
Whitefish
Wolf Point
ISO Commercial Risk Services, Inc. • 1355 S. Colorado Blvd. • Suite 306
Denver, CO 80222 • (303) 759-3511 • (800) 759-3512 • FAX: (303) 759-0742
Bruce Williams, City Manager
City of Kalispell
312 1st Avenue East
Kalispell► Montana 59901
Dear Mr. Williams:
August 25, 1993
RE: Public Fire Protection
Kalispell, Montana
We wish to thank you, and others for the cooperation given to
our representative during our recent survey. We have completed
our review of the fire insurance classification for your city
and advise that Class 6 is now appropriate.
The new classification is a retrogression from former Class 5.
The principal reasons for this retrogression are noted on the
attached Improvement Statements.
We are not implementing the class change at this time. If this
poorer fire insurance classification were placed in effect,
there would be changes for sprinklered properties, residential
occupancies insured under Homeowners or Dwelling type policies
and some other special schedule surveyed property.
The change will affect typical mercantile properties to a degree
depending upon the type of building construction, occupancy and
other property insurance premium calculation factors. The
overall effect is usually about +11% for wood frame,
non-combustible, masonry and fire resistive buildings. However,
variations in construction, occupancy and private protection can
result in increases or decreases from this average.
The above estimates apply only for insurance companies using -ISO
property insurance premium calculations. However, numerous
insurance companies use other than ISO property insurance
premium calculations so that the effect of the change in class
may be different for their policy holders.
A subsidiary of Insurance Services Office. Inc.
Bruce Williams -2- August 25, 1993
The city classification applies to properties with a needed fire
flow of 3,500 gpm or less. The private and public protection at
properties with larger needed fire flows are individually
evaluatedr and may vary from the city classification.
Before we re-classify buildings to reflect this increase, we
would like to know if the city desires to develop a program to
regain Class 5. It is important that you acknowledge this
letter within about one month and advise us when this matter
will be reviewed.
After review, if it is your decision to begin an improvement
program to regain Class 5, we would appreciate receiving, within
about 3 months, a list of the changes you intend to make.
Additionally, we would appreciate your estimate of the amount of
time which will be needed to complete each item. No
re-classifying action will be taken if changes are implemented,
or well under way, to regain the current insurance
classification within approximately one year.
To assist you in studying the grading results, we are attaching
a copy of our Grading Sheet, the results of the hydrant flow
tests witnessed during our survey, Classification Details and
Improvement Statements. Extra copies of this letter and
attachments are enclosed so that you may distribute them to
other interested parties, if you desire to do so.
The purpose of our visit was to gather information needed to
determine a fire insurance classification which may be used in
the calculation of property insurance premiums. This survey was
not conducted for property loss prevention or life safety
purposes, and no life safety or property loss prevention
recommendations will be made.
If you desire additional information, we will be available for a
conference, upon your request, to discuss with you and your
staff the details of the new classification. Such a conference
could be held at a mutually convenient time and location.
Yours very truly,
(1 C c¢'L9
R. D. Reple r
Manager - Operations
rdk:lt
Att.
Grading Sheet Kalispellr Montana
Public Protection Class: 6 Surveyed: Juner 1993
Credit Maximum
Feature SO-ed Credit
Receiving and Handling Fire Alarms... 5.16% 10.00%
Fire Department ...................... 15.55 ' 50.00
Water Supply ......................... 35.35 40.00
*Divergence ........................... . 11.46..
Total Credit 44.60% 100.00%
The Public Protection Class is based on the total percentage credit
as follows:
Sly I
1 90.00
or more
2 80.00
to 89.99
3 70.00
to 79.99
4 60.00
to 69.99
5 50.00
to 59.99
6 40.00 to 49.99
7 30.00 to 39.99
8- 20.00 to 29.99
9 10.00 to 19.99
10 0 to 9.99
*Divergence is a reduction in credit to reflect a difference in the
relative credits for Fire Department and Water Supply.
The above classification has been developed for fire insurance rating
and/or loss cost purposes only.
A subsidiary of Insurance Services Office. Inc.
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Kalispell, Montana Population Est. 11,801
Date Surveyed- June, 1993 Total Credit-44.60 Classification-6
_ _ i OR I 0 s . Dieu ["00 6's . -A_ 4_s_Y
This section of the Fire Suppression Rating Schedule reviews the
faclities provided for the general public to report fires, and
for the operator on duty at the communication center to dispatch
fire department companies to the fires.
Credit
Actual Maximum
1. (Item 414) Credit for Telephone Service
f` This item reviews the facilities provided
for the public to report fires, including
the listing of fire and business numbers in
the telephone directory. 2.00
2. (Item 422) Credit for operators
This item reviews the number of
operators on -duty at the communication
communication center to handle fire
calls.
3. (Item 432) Credit for Dispatch Circuits
This item reviews the dispatch circuit
facilities used to transmit alarms to
fire department members.
4. (Item 440) Total Credit for Receiving
and Handling Fire Alarms
2.16
(A) s5?eft
Wo
Kalispell, Montana Population Est. 11,801
Date Surveyed- June, 1993 Total Credit-44.60 Classification-6
FIRE DEPARTMENT
This section of the Fire Suppression Rating Schedule reviews the
engine and ladder -service companies, equipment carried, response
to fires, training and available fire fighters.
1. (Item 513) Credit for Engine Companies
This item reviews the number of engine
companies and the hose and equipment
carried.
2. (Item 523) Credit for Reserve Pumpers
This item reviews the number of reserve
pumpers and the equipment carried on
each.
3. (Item 532) Credit for Pump Capacity
This item reviews the total available
pump capacity.
4. (Item 549) Credit for Ladder Service
This item reviews the number of ladder
and service companies and the equip-
ment carried.
Credit
Actual Maximum
)d xv
apse
J
1.54 y 10.00
0.25 '` 1.00
-,00 5.00
5.00
1 *�a r-S cf{d.
(B) %, 6'
p;cKCd - 0)'
FIRE DEPARTMENT
(Continued)
Actual x,aximum
5. (Item 553) Credit for Reserve Ladder
Service
This item reviews the number of reserve
ladder and service trucks, and the
equipment carried. 0.71 1.00
6. (Item 56 1) Credit for Distribution
This item reviews the percent of the
built -upon area of the city which has
a first -due engine company within
1 1/2 miles and a ladder -service
company within 2 1/2 miles. C 2.08 4.OQ
7. (Item 57 1) Credit for Company Personnel
This item reviews the average number of
equivalent fire fighters and company
officers on duty with existing companies. 3.65 15.00+
B. (Item 581) Credit for Training
This item reviews the training facilities
and their use. 1.71` 9.00
9. (Item 590) Total Credit for Fire
Department 15.55 50.00+
+This indicates that credit for manning is open-endedr
with no maximum credit for this time.
(C)
Kalispell, Montana Population Est. 11,801
Date Surveyed- June, 1993 Total Credit-44.60 Classification-6
This section of the Fire Suppression Rating Schedule reviews the
water supply system that is available for fire suppression in
the city.
!Credit
Actual Maximum
1.
(Item 616) Credit for the Water System
This item reviews the supply works, the
main capacity and hydrant distribution.
32.06 35.00
2.
(Item 621) Credit for Hydrants
This item reviews the type of hydrants,
and method of installation.
l.so 2.00
3.
(Item 631) Credit for Inspection and
Condition of Hydrants
This item reviews the.:frequency of
inspections of hydrants and their
condition.
1.39 3.00
4.
(Item 640) Total Credit for Water Supply
35.35 40.00
(D)
Kalispell, Montana Population Est. 11,801
Date Surveyed- June, 1993 Total Credit-44.60 Classification-6
Actual Maximum
Receiving and Handling Fire Alarms 5.16 10.00
Fire Department 15.55 50.00
Water Supply 35.35 40.00
*Divergence -11.46
Total 44.60 100.00
*Divergence is a reduction in credit to reflect a
difference in the relative credits for Fire Department
and Water Supply.
(E)
-2-
Credit For Dispatch Circuits (Item 432).
For maximum credit in the Schedule, there should be two alarm
dispatch circuits to the fire station in accordance with
National Fire Protection Association Standard, 1221.
For maximum credit in the Schedule, one of the two alarm
dispatch circuits should be electrically supervised.
FIRE DEPARTMENT
Credit For Engine Companies (Item 513).
For maximum credit in the Schedule, three engine companies are
needed in your city. These are calculated as follows:
Three for the Basic Fire Flow of 3,500 gpm.
You have one engine company in service. This is calculated as►"`
follows: 5'Y
G'd ens 3e
92% for Engine 1 because of insufficient equipment.
For maximum credit in the Schedule, at least two engine.
companies should respond to all firsta fo n
buil in a cre i for engine companies has been reduced by
0%_due to lack of adequate response to part of the city.
Credit For Reserve Pumpers (Item 523).
For maximum credit in the Schedule, one fully -equipped reserve
pumper is needed. You have one reserve pumper. This is
calculated as 75% for Pumper 2 because of insufficient"
-3-
For Credit For Ladder Service. (Item 549).
For maximum credit in the Schedule, one ladder company is needed
in your city. This is calculated as follows:
one ladder company due to the size of the area served.
You have one ladder company. This is calculated as follows:
12% for Engine Ladder 1 because of insufficient equipment,
lack of separate apparatus and Ladder 1 not in service on
lst alarms.
Credit For Reserve Ladder Service (Item 553).
For maximum credit in the Schedule, one fully -equipped reserve
ladder truck is needed. You have one reserve ladder truck. This
is calculated as follows:
664 for" Truck 1 becau11
se] of insufficient iquipment "end aerial
ladder'tests. _
Credit For Distribution (Item 561).
For maximum credit in the Schedule, all sections of the city
with hydrant protection should be within 1 3l2 miles of an
adequately -equipped engine company and 2 1/2'miles of an
adequately -equipped ladder, service, engine -ladder, or
engine -service company. The distance to be measured along
all-weather roads.
Credit For Company Personnel (Item 571).
An -increase in the response of fire department members by one
person will increase the fire department 1.25%.
-4-
Credit For Training (Item 581).
0
�VA*� g a g s
,..f ® tie,
ef
ye �� des
use 6f
o1y
For maximum credit in the Schedule, complete facilities should
be provided and the training program should be improved. You
received 19% credit for the current training program and the use
of facilities.
For maximum credit in the Schedule, pre -fire planning
inspections of each commercial, industrial institutional and
other similar -type building should be made twice a year.by
company members. Records of the inspections should include
-complete and up-to-date notes and sketches.
For maximum credit in the Schedule, records should be kept of
all training.
WATER SUPPLY
Credit For The Water System (Item 616).
For maximum credit in the Schedule, the needed fire flows should
be available at each location in the city. Needed fire flows of
2,500 gpm and less should be available for 2 hours, 3,000 and
3,500 gpm for 3.hours and all others for 4 hours. See the
attached table for an evaluation of fire flow tests made at
representative locations in your city.
All AWWA standard hydrants within 1,000 feet of a building,
measured as hose can be laid by apparatus, are credited; 1,000
gpm for hydrants within 300 feet; 670 gpm for 301 to 600 feet;
and 250 gpm for 601 to 1,000 feet. Credit is reduced when
hydrants lack a pumper outlet., and is further reduced when they
only have only a single 2 1/2-inch outlet.
a
-5-
Credit For Hydrants (Item 621).
For maximum credit in the Schedule, all hydrants should have a
pumper outlet, 6-inch or larger branch connection, uniform size
operating nut and should operate in a uniform direction.
Credit For Inspection And Condition Of Hydrants (Item 631).
For maximum credit in the Schedule, all hydrants should be
inspected twice a year, the inspection should include operation
and,a test at domestic pressure. Records should be kept of the
inspections. Hydrants should be conspicuous, well located for
use by a pumper, and in good condition.
FIRE FLOW TESTS
Kalispell, Montana
Tests Made On 06-15-93
Needed
Limited
Limited
Limited
Fire
By
By
By
Test
Flow*
Supply
Distribution
Hydrants
NO,
(;pm
Works
Mains
Spacing-
1
4,500
X
5
3,000
X
6
3,000
X
X
7
5,000
X
8
3.500
X
X
9
3,500
X
77-3
4,500
X
X
77-5
5 400
X
*Needed fire flows exceeding 3,500 gpm are not considered in
determining the classification of the municipality.