South Sioux City
The official government website for the City of South Sioux City, Nebraska
Insurance Services Office, Public Protection Classification
Discussion of the Insurance Service Organization’s (ISO), Community Hazard Mitigation program is a part of the ongoing responsibility for the SSCFD to the Community as we mitigate the minimum standards and respond to calls the SSCFD strives to meet the standards and provide the community the potential to receive lower insurance cost on home and business policies for our partners in the community.
The Insurance Service Organization’s (ISO), Community Hazard Mitigation actively works with fire departments, building departments, water suppliers, and municipalities with our Public Protection Classification (PPC®), Building Code Effectiveness Grading Schedule (BCEGS®), water outreach, and emergency communication center review programs.
In the early 1900s, major U.S. cities suffered disastrous fires that destroyed billions of dollars’ worth of property. In the aftermath, insurance companies realized they needed advance information on the fire loss characteristics of individual communities.
The National Board of Fire Underwriters (NBFU) had been established in 1866 to promote fire prevention and public fire protection. After a number of conflagrations — including the great Baltimore fire of 1904, which claimed 140 acres, more than 70 blocks, and 1,526 buildings — the NBFU expanded its scope, developing the Municipal Inspection and Grading System. Under that program, engineers evaluated the fire potential of many cities. In response, those cities improved their public fire protection services.
Since 1909, the Municipal Inspection and Grading System and its successors have been an important part of the underwriting and rating process for insurers writing personal and commercial fire policies. ISO’s Public Protection Classification (PPC®) Service now gives insurers credible data to help them develop premiums that fairly reflect the risk of loss in a particular location.
The Public Protection Classification (PPC®) program recognizes the efforts of communities to provide fire protection services for citizens and property owners. A community’s investment in fire mitigation is a proven and reliable predicator of future fire losses. Insurance companies use PPC information to help establish fair premiums for fire insurance — generally offering lower premiums in communities with better protection. By offering economic benefits for communities that invest in their firefighting services, the program provides an additional incentive for improving and maintaining public fire protection.
The program also provides help for fire departments and other public officials as they plan, budget for, and justify improvements. The most significant benefit of the PPC® program is its effect on losses. Statistical data on insurance losses bears out the relationship between excellent fire protection, as measured by the PPC® program, and low fire losses. PPC® helps communities prepare to fight fires effectively.
ISO’s Public Protection Classification (PPC®) information plays an important part in the decisions insurers make affecting the underwriting and pricing of property insurance. In fact, most U.S. insurance companies — including the largest ones — use PPC® information in one or more of the following ways:
to identify opportunities for writing new business insurances
- to manage the quality of community fire protection across their book of business
- to review loss experience in various rating territories
- to offer coverages and establish deductibles for individual homes and businesses
Insurance companies — NOT ISO — establish the premiums they charge to policyholders. The methodology a company uses to calculate premiums for property insurance may depend on the company’s fire loss experience, underwriting guidelines, and marketing strategy.
PPC may affect the underwriting and pricing for a variety of personal and commercial insurance coverages, including homeowners, mobile home, fine arts floaters, and commercial property (including business interruption). Assuming all other factors are equal, the price of property insurance in a community with a good PPC® is lower than in a community with a poor PPC®.
PPC Review
ISO concluded its review of the fire suppression features being provided for South Sioux City.
The resulting community classification is Class 04/4X.
If the classification is a single class, the classification applies to properties with a Needed Fire
Flow of 3,500gpm or less in the community. If the classification is a split class (e.g., 6/XX):
- The first class (e.g., “6” in a 6/XX) applies to properties within 5 road miles of a
recognized fire station and within 1,000 feet of a fire hydrant or alternate water supply.
- The second class (XX or XY) applies to properties beyond 1,000 feet of a fire hydrant
but within 5 road miles of a recognized fire station.
- Alternative Water Supply: The first class (e.g., “6” in a 6/10) applies to properties
within 5 road miles of a recognized fire station with no hydrant distance requirement.
- Class 10 applies to properties over 5 road miles of a recognized fire station.
- Class 10W applies to properties within 5 to 7 road miles of a recognized fire station
with a recognized water supply within 1,000 feet.
- Specific properties with a Needed Fire Flow in excess of 3,500 pm are evaluated
separately and assigned an individual classification.
Divergence Factor
Even the best fire department will be less than fully effective if it has a less-than-adequate water supply. Similarly, even a superior water supply will be less than fully effective if the fire department lacks the equipment, personnel, or operational considerations to use the water. Your preliminary Fire Suppression Rating Schedule (FSRS) score is subject to modification by a divergence factor, which recognizes any disparity in the relative level of effectiveness of your fire department and water supply.
The divergence factor mathematically reduces your preliminary scores if the fire department and water supply scores are incompatible with each other.
One must also understand engine companies and water supply complement each other. It is very important the 50/40 ratio remain balanced. If one scores better (than the 50/40 ratio) in either of these two categories, ISO will apply what is called “Divergence Points” (negative points) in order to maintain this ratio.
In other words, you could have a brand new engine but if you have very little water to pump with, you may not get full credit for the engine. You are only as effective as the weakest link.
Example:
You grade 40 points on Fire Department but only 10 points on Water Supply. Divergence points are figured at 50% of your (Credit for Water Supply) minus 0.8 (Credit for Fire Department). The formula is:
Divergence Formula
The Divergence in the above example is equal to -11.0 points.
Therefore, the net Credit for Fire Department and Credit for Water Supply (after Divergence) is 39.0 points.
Again it is stressed that this 50/40 balance is critical to obtaining a good score and having an effective operation. You do not want to receive any negative "Divergence Points".
Does this mean you should not buy a new engine because you may not get full credit for it?
NO!
You should always strive to improve. I am simply pointing out both categories must balance for you to have effective fire suppression capabilities.
Community’s Risk Reduction
The Community Risk Reduction section of the FSRS offers a maximum of 5.5 points, resulting in 105.5 total points available in the FSRS. The inclusion of this section for “extra points” allows recognition for those communities that employ effective fire prevention practices, without unduly affecting those who have not yet adopted such measures. The addition of Community Risk Reduction gives incentives to those communities who strive proactively to reduce fire severity through a structured program of fire prevention activities.
The areas of community risk reduction evaluated in this section include:
- fire prevention
- fire safety education
- fire investigation
- News
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