How ISO fire ratings impact your home insurance

It is important to understand the risks that your home could be at risk and how they may impact your homeowners insurance premium. The following factors can affect a homeowners insurance premium:

  • Roof condition
  • Construction of a home
  • Age of your home
  • Cost of replacement
  • Flood risk
  • Marital status
  • Deductible
  • Special ZIP Code
  • Your area has high crime rates

Fire risk is another variable. Of all the variables, it is the most important. In 2019, the National Fire Protection Association reported $12.3 Billion in fire-related property loss, a 10.8% increase on the previous year.

Fires can often be unpredictable. The fact that your home could be severely damaged in an event of a fire is something that is not predictable. A house fire can cause severe damage depending on how it was constructed and what its contents are.

When it comes to house fires there are many factors to consider, including the proximity of your home to fire hydrants or fire stations. These factors can have a dramatic impact on the price of homeowners insurance. These factors are considered when determining your insurance premium. Home insurance companies use an ISO rating.

What is an ISO fire rating?

The Insurance Services Office provides an ISO fire rating, which is a score that fire departments and insurance companies can use to determine how prepared they are for fire. This score indicates how well prepared an area and community are for fires. It focuses mainly on local fire departments and water supplies, but there are other factors that can affect an area’s score.

An ISO score can have an impact on the insurance premium for every homeowner in the region. It may even lead to coverage being denied by the insurer in certain circumstances.

How to determine an ISO fire rating

The ISO lists four categories which account for the scoring model regardless of where you live in the U.S. Each category reflects a different aspect in fire prevention and each carries a particular weight.

An ISO score of 1 is the highest, while a 10 is the lowest. The ISO score for an area is a 1. Access to adequate water and fire hydrants is not something that can be fixed quickly. This would require extensive infrastructure development.

Although it is possible that your homeowners insurance policy could be denied due to an ISO report, many companies only use ISO as part of their calculations. If you are unable to obtain a policy from one company, you might be able submit applications to other homeowners insurance providers. Your ISO score may not be enough to deny coverage from all carriers.

What does the ISO fire rating have to do with insurance rates?

According to the Insurance Information Institute , fire and lightning were responsible for 32.7% homeowners’ insurance losses in 2018. Insurance companies still take fire safety seriously when calculating premiums. This is why they use ISO scores for determining how risky your home is.

Your insurance provider will be more likely to insure your home if your fire department has received a high ISO score. While it is possible for this to happen, the odds of your home being destroyed by a fire are less if you live in an area with a low ISO score.

A higher premium may be charged for homes located in areas with low ISO scores. This is due to the increased risk that companies take by insuring them. Some companies don’t even consider ISO scores, but instead use other data to assess risk.

Home insurance companies consider many factors, not just the ISO score. They also consider other factors such as:

  • Flood risk
  • Sinkhole risk
  • Earthquake risk
  • Tornado risk
  • Hurricane risk
  • Crime risk

Each company has its own pricing algorithm that determines how much protection a customer will need. Homeowners may find it beneficial to compare quotes from different insurers, as there are many differences among them. Every provider has a different approach to underwriting risk factors, particularly those that revolve around fire.

How can I determine my home’s ISO rating?

The ISO fire rating assigned to your home is not unique; it’s determined by the surrounding area. This means that your neighbors and you should all have the same ISO fire rating.

Your local fire department is the only one who can access your ISO rating. Unless the fire department announces it, it is not usually made public. Although some fire departments may provide the area’s rating for you if they have your zip code, this is not a requirement and they might deny your request.

There are many other methods to assess the risk of your home being set on fire if you cannot determine your ISO score. An interactive map of the U.S. by the National Interagency Coordination Center, or the interactive wildfire timeline by the National Park Service can give you an idea. These are both very comprehensive and informative. Although it won’t improve your rates with your homeowner’s insurer, this information can help you choose a carrier and discuss coverage options.

Important considerations

  • The public is usually not allowed to see ISO scores unless they are made public by the fire department.
  • ISO scores are indicative of an area’s fire rating, and not property-specific.
  • A score of 1 indicates the highest area score, while a score of 10 signifies the lowest.
  • Certain insurance companies don’t use ISO scores to calculate homeowners’ premiums.
  • Each home insurance company uses the ISO data in a different manner depending on its underwriting guidelines.
  • You may be approved for insurance by another provider if you are denied a policy due to an ISO fire score in your area.