Fire districts fight to keep insurance rates down

The Oregon Fire Chiefs Association in March of this year expressed growing frustration with the ISO (Insurance Service Office), the group responsible for setting fire insurance rates throughout the state of Oregon. A conversation with Chief Dan Petersen has revealed some interesting facts about the organization and about the relationship ISO has with the fire departments and residents of the state.

A new proposal by ISO is going to make it so that rural residents may not be covered by fire insurance. Chief Petersen has done what he can to comply to prevent such an occurrence, but the unfortunate thing is that ISO won’t con=me clean with what they want to see happen, making it very difficult to comply. Petersen cited a case in the city of Hood River, where ISO had given clear instruction in what they required. When Hood River complied with everything ISO requested, ISO came back and instead of lowering rates, raised them instead. Not only had taxpayers complied with requests, but they ended up paying increased rates too.

Petersen said that ISO is a for-profit organization made up of incurance companies and insurance executives. So it is in their interest to see rates escalate and this, in his opinion, constitutes a serious conflict of interest.

Fire District #3 has undertaken to decrease response time to all areas covered by the district. In a recent move, they have approved the addition of mobile homes on the site of station houses that will house volunteers to have them on site when situations occur. This will cut response times, hopefully with the result being compliance with ISO. The strategy being that the response will be quicker and the potential for saving structures much greater.

But ISO has been evasive as to how fire districts can comply. Unfortunately, most of those codes were written for New York City and do not, in reality, apply to the rural areas of the west. Yet, they are all lumped together, forcing everyone not living within a five mile radius of a station with full-time staff to either pay higher rates or go without insurance. It is nothing more than a gimmick to increase rates.

Chief Petersen did say that there are a handful of insurers that are not using the services of ISO, therefore the new restrictions won’t apply. However, a majority of the companies will ruse they system.

The chiefs in the state of Oregon have hammered away at getting ISO to change to allow a different system in the rural west, but so far without success. One goal is to find some transparency, to dig into the experience data and find out how local companies can comply. So far, they have provided a moving target and will not help in the compliance. This does seem to fall under the category of a conflict of interest.

There will be more to come out on the subject at a later date.


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