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How Fire Hydrants Affect Your Community's Insurance Rates

Posted by Stanley Diamond on Thursday, March 19, 2015 @ 09:35 AM

What do fire hydrants have to do with property insurance in your community? And how can water system managers help lower insurance costs throughout their communities?


The answer is in the form of two acronyms: PPC and ISO.

First, what is ISO?

ISO stands for Insurance Services Office

The organization is a member of the Verisk Analytics family of companies and acts as an advisory organization for insurers. They are the leading source of information about property/casualty insurance risk. 

ISO runs a program called PPC, which brings us to our second important acronym.

What is PPC?

The Public Protection Classification (PPC™) program provides important, up-to-date information about municipal fire protection services in your community.

ISO collects information about the quality of public fire protection in more than 47,500 fire protection areas across the United States. In each of those protection areas, ISO analyzes the relevant data and assigns a Public Protection Classification — a grading from 1 to 10.

Class 1 generally represents superior property fire protection, and Class 10 indicates that the area’s fire suppression program does not meet ISO’s minimum criteria.

Most U.S. insurers of home and business properties use ISO’s PPC in calculating premiums. In general, the price of insurance in a community with a good PPC is lower than in a community with a poor PPC, assuming all other factors are equal.

How Water Supply System Affects Classification

A community’s PPC depends largely on the fire department and emergency communication systems.

However, an important aspect of a community's classification is the water supply system:

"including the inspection and flow testing of hydrants and a careful evaluation of the amount of available water compared with the amount needed to suppress fires."

The higher your community is rated through the PPC program, the lower your insurance rates throughout the community.

Hydraulic Flow Tests

Wessler uses the ISO's hydraulic flow tests and hydraulic modeling to understand the challenges and difficiencies in a community's water system. We can then use those models to prioritize capital improvements in the distribution system.

What can you learn through hydraulic modeling?

  • where there are deficiencies in the distribution system
  • identify and right size improvements to address those deficiencies
  • where additional storage may be needed in the system
  • what operational changes can be made to maximize the performance of the distribution system
  • what changes made be needed to maintain the water quality throughout the distribution system
  • which improvements will provide the most benefit

When a municipality uses the results of these test, they can make changes and improvements that will eventually lead to an improved Public Protection Classification, and thus reduce insurance costs for residents.

If you're interested in learning more about how you can help reduce insurance costs and improve your PPC, register for Stan Diamond's free webinar. He has been educating the public about this issue for many years. The webinar is sure to be extremely valuable for water systems managers and community decision makers. Update: Watch the recorded presentation here.

How to Improve Your Community's PPC & Lower Insurance Costs Watch the Recorded Presentation




Tags: community water system, fire hydrants, water


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