I have been given the heads up that ECCFPD has been notified that the Insurance Services Office (ISO) was alerted late last week of the three station closures in East County. The District was also informed the investigation and research on an ISO rating change will begin in the coming weeks.
The whole ISO thing has many layers to it and many factors, but let me break it down as simple as possible. Just think of it like a game of golf. You want the lowest possible score (in this case rating) as the higher the ISO rating, the more you pay.
In East County’s case, you want a 5 or better because homeowner’s rates do not typically decrease below a Class 5. An ISO rating of 10 means no fire coverage and a 9 is a minimum department. Business owners also benefit from better ratings and they stand to gain even more as their savings continue all the way to a class 1 rating.
This was a big debate during Measure S as this was deemed a scare tactic by the opponents. This scare tactic claim is just another example of the misinformation that was being produced by the opponents as East County now gets to live with the ISO reality for many years. Needless to say, the scare tactic claim was wrong and a poor choice of words.
Remember, not everyone will see an increase at the same time because not everyone bought at different times of the year.
I have used the example of Morgan Territory Road in the past and will do it again. When the Sunshine Station closed, some folks out there saw an increase of up to 400% to even be uninsurable. They saw an increase of premiums jump between $1,500 to $4,000!
Just last week, Island Joe’s on Bethel Island was the first business to publically state they had an increase of just under $3,500 annually as opposed to simply paying $197 annually for a parcel tax. The moment their insurance company asked where the hydrants were in proximity to the business (Bethel Island doesn’t have any), they were in trouble. That second question when they ask for the location of the nearest fire station (the answer is Oakley) they were doomed.
So how does ISO affect me?
ISO is a service organization (for profit) to the insurance industry, uses a 1 – 10 rating scale with 1 being the best level of service and 10 being no service at all. The ISO reviews fire protection in three major categories:
- Communication (10%) – This evaluates the function and reliability of the dispatch service.
- Water Supply (40%) – This evaluates the community’s ability to deliver firefighting water in sufficient volumes to combat fires in buildings.
- Fire Department – (50%) – This evaluates the capability of the fire department to effectively respond to and extinguish a fire. Items reviewed include apparatus, staffing, training, and station locations.
Here is a typical Annual Premium Cost Based on Home Value of $250,000 which I pulled from the Contra Costa Taxpayer Association website.
- ISO Rating 5: $1,179
- ISO Rating 6: $1,262
- ISO Rating 7: $1,359
- ISO Rating 9: $2,549
- ISO Rating 10: $2,826
With an ISO rate jumping higher on the horizon, it means many in East County will see an increase in their insurance premiums based off common sense economics. It’s a free pass for insurance companies to increase their bottom line with the station closures.
This should be the catalyst needed to begin a movement to bring back fire stations. Sometimes, the only way to change public perception is sometimes to feel a bit of pain in the pocket book to realize its better to pay a little for a parcel tax and to receive services, than it is to pay more to an insurance company and to receive reduced services–just ask the folks who needed service 4th of July weekend.
People should have listened to State Insurance Commissioner Dave Jones as he did warn folks if Measure S failed, residents would see “skyrocketing” rates.
As more information becomes available, I’ll pass it along!