Monday, January 10, 2011

Insurance Costs to Skyrocket

“Lying is done with words and also with silence.” - Adrienne Rich

The Fire Starter has begun to present questions and answers regarding the cost of any plan to create a fire district which encompasses Johnson City, Endicott and parts of the town of Union.  The better armed we are as citizens, the better able we are to cut through the cloud of lies and half truths being perpetuated by certain dissolutionists and Village Board members.

One issue which may escape notice from many is the cost of homeowners insurance.  One of the major factors in the price of home owner's insurance is the nature and quality of fire service in the community.  Most insurance companies utilize rating information provided by Insurance Service Organization (ISO).  ISO is a a resource to insurance companies that evaluates all aspects of the quality of fire service in a given community.  ISO ranks fire protection on a scale of 1 to 10 with 1 being the best and 10 being no fire protection.

ISO bases its evaluation of Fire Departments upon the number of personnel on duty, training level of personnel (paid or volunteer), the availability of appropriate equipment and the availability of water both through hydrants and pumper trucks.  By evaluating these factors, insurance companies have quantitative analysis of the likely severity of fire damage should a fire occur.   In other words, even a slow response from a  volunteer department may protect neighboring houses, but will likely result in a total loss for the owners of the home needing the initial response.  A quick response from highly trained paid fire fighters will result in less damage to the structure and reduce the cost of repair.

As the Villages consider creating either a volunteer department or a combination paid and volunteer department, it is important to know what effect this will have of the resulting department's ISO rating.  A lowered ISO rating translates into an increase in homeowners insurance premiums.  Several studies by other communities have shown that a drop in ISO rating of just two levels will result in the average home owner's premium increasing by over $105.00 year.  This should be startling information.  As we pointed out last week, true anticipated savings from totally eliminating the paid department were 82.12 for the average homeowner.  For a combination department, the "savings" would be significantly less.

As we have pointed out previously, there are significant life and death costs in either eliminating paid fire service or crating a "combination" department.  But when the elimination of the paid department merely transfers the cost from your tax bill to your insurance bill, why would we want to take this risk?

And if there are no true savings and a clear loss of service, why is Hannon advocating the change?

1 comment:

  1. Really interesting Insurance article! I appreciate your new idea. Thanks for sharing with us.

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