It may seem like a story of David and Goliath. David is Milford working with a mostly volunteer fire department, while Goliath is the Insurance Services Office (ISO), a large advisory organization that consults with the nation's property and casualty insurance companies.
The story begins some ten years ago when ISO inspectors audited the Milford Fire Department and found the town was not adequately prepared to move large volumes of water over a sustained period given the town's rapid growth. The ISO rates fire departments on a scale of 1 to 10 with 1 being the best. At that time, Milford was rated as a 4 for areas within 1000 feet of a hydrant and a 9 for areas greater than 1000 feet from a hydrant. It could have been left at that since it is not uncommon for smaller towns without a full time fire department to have such a rating. However, according to Jeff Marshall, Captain of the Milford Fire Department, his department was not focused on a specific ISO rating, but rather the safety needs of the town. That said, it was realized that by making the town safer, they could simultaneously improve the ISO rating.
The improvements required by ISO were not easy or quick fixes. The Milford Fire Department had to work hard and execute a plan that included practice drills with area fire departments, improved access to water sources and training specifically for rural water supply operations. These drills, in addition to the purchase of a new fire truck prompted the Milford Fire Department to contact ISO for a new audit.
The result was very positive and what was once considered a 4 within 1000 feet of a hydrant was bettered to a 3, and what was considered a 9 for areas more than 1001 feet from a hydrant was bettered to an 8B. According to Marshall, "The result of the ISO 4 rating was not only based on the flow of water, but also the ISO auditor's comments around our training, management skills, dedication, equipment upkeep and operational ability."
Milford's new rating makes it one of the highest rated fire departments in the state.
What does this protection class change mean for me as a building owner in regards to my insurance?
An improvement in the ISO protection class rating will improve the overall risk factor for a building within Milford, but the exact impact will vary greatly by insurance company. The reason is because there are many factors that go into rating a policy including distance from water source, claims activity, coverage amounts, credit scores, etc. The distance from a hydrant is certainly a factor; however it would only be a factor for the peril of fire. Most policies cover a broad range of losses, and not just fire.
How much will I save on homeowners or business owners insurance with Milford’s ISO change?
Again, given the number of variables that go into rating an insurance policy, it is a difficult question to answer and will vary by insurance company.
The bottom line is that there is not an insurance company selling property insurance that would see this change as a negative factor and charge more because of it. That said, if you have a carrier that decreases your premium because of the improved fire protection, but then files a rate increase with NH’s Department of Insurance, you may not see the full impact of the single change. Other factors that can impact your property insurance include claims, changes in credit score, coverage amounts, etc.
When will I see this change on my policy?
The reclassification took place April 1st; however when your insurance company recognizes this change can vary. Of the ten insurance companies sampled by HPM Insurance, most indicated that the change would impact the policy upon the policy’s renewal date, while other carriers indicated that this change could be reflected immediately.
Do I need to do anything to ensure my property policy is accurately reflecting the proper fire protection class rating?
Some insurance companies will have this information automatically updated into their rating software directly from ISO, while others will need to have the agent manually request a change for each policyholder in Milford.
At HPM Insurance we are aware of this change and will have our risk managers pay close attention to those impacted in Milford to ensure their policy reflects this update upon each renewal.
Other insurance companies and agencies, especially those outside the immediate area, may have to be told to update the policy as it will be difficult to know universally which insurance companies are automatically updated by ISO and those that are not. We would suggest that you simply give your agent or company a call.
HPM Insurance wants to congratulate the Milford Fire Department for making the citizens, homeowners and business owners of Milford safer. It is one thing to say a fire department works hard to make its community safe, but quite another to actually prove it. Congratulations on a job well done.