What Is an ISO Rating, and How Do They Affect Home Insurance?

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ISO ratings are numbers from 1-10 assigned to communities indicating how well their fire department can protect them from fires.
Even if you’ve shopped for home insurance before, it’s not that likely you've seen or even considered the implications of an ISO rating.
There’s a good chance you don’t know what it means, either. Most people have no idea that ISO ratings in their neighborhoods affect their home insurance rates.
So, what are ISO ratings, how are they calculated, and how do they affect your home insurance policy? Car insurance comparison shopping and broker app Jerry has compiled everything you need to know about ISO ratings.
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What is an ISO rating?

The ISO, or Insurance Services Office, is a division of Verisk Analytics. Established in 1971, ISO has been assessing insurance risk for a variety of purposes, including home insurance, for decades.
ISO assesses each fire department’s ability to protect the community and assigns it a score from 1 to 10. The lower the number, the better the rating. A community rated with an ISO score of 1 is among the elite best-protected neighborhoods in the nation.

How are ISO ratings calculated?

A fire department’s ISO rating is calculated based on four scoring criteria:
  • 50 points are available for a community based on their fire department’s staffing levels and training, as well as the community’s proximity to a fire hall.
  • 40 points are at stake for availability of water supply, including hydrant placement and the volume of water available.
  • Up to 10 points can be assessed based on the area’s emergency communication’s systems, like 911 response.
  • An additional 5.5 points are available for "community outreach including fire prevention and safety courses".
Fire departments who score above 90 receive an ISO rating of 1, but less than 1% of communities are rated as such. The average rating is a 5, with urban areas tending to rank higher than rural communities.
However, a community that is outside a fire station’s five-mile radius automatically receives a 10 rating, regardless of how the rest of the scoring tallies up. That’s because it’s seen as a higher risk solely due to longer response times.

ISO ratings and insurance rates: What's affected?

Although ISO fire ratings are an important tool to assess a community’s emergency response capability, they are also a useful system for home insurance providers to more accurately determine insurance premiums for homeowners.
For two identical properties, it makes sense for an insurer to assess higher premiums to a homeowner that’s in a rural area with slower response times and lesser-trained emergency response technicians than for a property that’s nearby a firehouse and staffed by well-trained professionals. In that way, the higher-risk customer pays a higher premium and, ideally, the lower-risk customer pays less on their home insurance.
According to Verisk, about 75% of insurance companies weigh the community’s ISO rating when pricing their insurance products. How much money does it save you to live in a neighborhood with a better ISO rating? That’s up to the insurer, and it’s a calculation that you won’t find easily.
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Can I find my neighborhood’s ISO rating?

Wondering how you can find your neighborhood’s ISO rating? Or are you planning to move to a new area and want to know how well their fire department performs? Unfortunately, you aren’t able to access ISO ratings without going straight to your source: the local fire department. It's best to call the fire station and ask what the ISO classification is.

How can I improve ISO ratings?

There's not really anything you alone can do to improve your community's ISO rating. It will b=need to be a community effort.
Ratings can be improved with greater water supply, having more firefighters in your area available for emergencies at a moment's notice, and supplying your department with better alarms and communication systems.
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