FAYETTEVILLE — Upgrades to fire services could save homeowners on insurance premiums.
The Insurance Services Office recently changed the Fire Department’s Public Protection Classification rating from Class 4 to Class 2.
“I expected it to move up quite a bit because we built three fire stations and made improvements to the water supply,” said Chief David Dayringer. “I was really hopeful that it would go up to a 2.”
The Fire Department received its last insurance rating in the late 1990s. Dayringer said the agency provides a new insurance rating at a department’s request.
By The Numbers
Insurance Service Ratings
• Bentonville: 2
• Fayetteville: 2
• Lowell: 3
• Springdale: 2
• Rogers: 3
Source: Staff Report
“This is something we were waiting on,” he said. “We contacted ISO two years ago, but they had personnel changes that delayed the process.”
A department’s insurance rating is the common standard many companies use to establish fire insurance premiums.
The rating measures firefighting potential that includes information about equipment, fire station locations, staffing, emergency communications, water supply and training.
Dayringer said the Fire Department worked with other departments, including telecommunications to upgrade its dispatch system and utilities to add a water tower, fire hydrants and water mains. The city also implemented a hydrant inspection program.
Fire service ratings are based on a 1-10 scale, 10 is no fire protection and 1 is the best coverage.
Springdale and Bentonville have Class 2 ratings. Searcy is the only department in Arkansas rated Class 1.
Fayetteville’s new rating becomes effective June 1.
Jeff Danley, an agent with Farmers Insurance Group, said the lower a department’s insurance rating, the better the insurance price for homeowners. Danley said the new rate typically kicks in when homeowners renew their insurance contract.
If the new insurance rating takes effect after a homeowner has renewed his policy, Danley said policy holders must get a letter from the fire chief.
“They have to get a letter from the fire chief saying that their rating was reduced,” he said. “It takes about 30 days to change in our system.”
Gary Stephenson, a spokesman for State Farm Insurance, said State Farm establishes premiums for policyholders depending on events in an area.
“We set out premiums based on what actually occurs in an area,” he said. “We believe that enables us to have a more accurate rate profile for an area. Smaller companies typically don’t have as much data to use, which is why for years they’ve used improved ISO ratings with discounted premiums.”
Stephenson said the department’s lower rating means better fire protection and a more favorable claims experience.
Kevin Boydston, deputy chief of the Bentonville Fire Department, said his agency moved from an Class 3 rating to Class 2 in 2005.
“We added a station, and the city made sure it extended the water lines as needed,” he said. “We also increased some manpower and apparatus requirements and made training additions.”
Boydston said the rating change cut insurance by about 5 percent for Bentonville homeowners.
“The lower insurance is also more attractive to commercial and business industries because their insurance is lower too,” he said. “It’s a good selling point for the city.”
Dayringer said the Public Protection Classification report also provides information the department uses in strategic planning, budgeting and justifying fire protection improvements.
“There are things in the report that we can address in the future,” he said. “For instance, we need more firefighters assigned to each shift and we need another ladder company. We’ll take all of this information and make it a part of our analysis of service delivery.”