NEW "CLASS 4" INSURANCE SERVICE OFFICE (ISO) GRADING

Recommendation:

Direct Staff to publish the results of the new ISO Classification.

Background:

The ISO grading schedule for municipal fire protection provides a guideline for a municipality to classify their fire defenses and physical conditions. The major components graded by ISO are the Fire Department, Water District, and the Communication's Center. Insurance companies utilize these grading scores to establish base rates for fire insurance purposes.

The Fire Suppression Grading Schedule produces ten different public protection classifications, with a Class I receiving the most rate recognition and a Class 10 receiving no recognition. Simply stated what this means is that the lower classification a city fire department receives the lower the fire insurance premiums.

Analysis:

ISO Gradings are performed at 7 to 10 year intervals. The City of Hermosa Beach has been a "Class 5" city for over 20 years. In April of last year the city was again evaluated by ISO. The results of our April evaluation are that the city for the first time has received a "Class 4" grading. This lower classification is a direct result of the improvements made in the Fire Department over the past three years. The new classification was effective and published in November of 1998.

All commercial property owners should contact their fire insurance companies and inform them of our new ISO Classification and request a premium reduction.

Calculations for residential fire insurance premiums very from insurance company to insurance company. Most insurance companies group residential premiums into two categories, below a five and above a five. Staff also recommends that all residential property-owners contact their fire insurance companies to inquire about possible premium reductions.

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