Recent news from the mountain declared insurance rates “skyrocketed” after the Hoodland Fire Department received bad marks. Some media outlets quoted outraged policy holders and a baffled fire chief, having learned the fire department received a low rating from an independent assessment firm, driving premiums through the roof.

The reality is that New Jersey-based Insurance Services Office, a component of Verisk Analytics, completed an impartial assessment of the department in December, but the Oregon State Insurance Division has not yet recognized the findings, and in fact has delayed a decision beyond the requested July 1 deadline to make the findings effective.

“This current ISO rating has not been accepted by the state of Oregon,” said division policy analyst Cece Newell. “It is not in effect. The ISO analysis has nothing to do with the insurance increase.”

Newell said the rate increase is the result of a variety of risk analysis factors, and that less than 25 percent of the risk assessment has to do with fire protection. The trouble started when ISO announced its proposed ratings ahead of state acceptance.

“ISO filed the proposed national plan and told the fire departments how they would be rated,” Newell said. “Some of the fire departments know that they will get a different rating, and they may be concerned, but it hasn’t happened yet.”

Also, the proposed ratings, in some cases, may not reflect the current circumstances of a given department. Division actuary Dave Dahl said that in some cases the ISO assessment schedule used is an older one that may not consider upgrades or changes made to a particular department.

“It is possible that some departments may have been assessed with an older schedule that has not been updated,” he said.

Dahl said the old assessment schedule has been in place for 30 years with no changes.

“It’s usually years before a fire station is reassessed,” he said. “Some of the factual data is not happy information for the department, and it could be that Hoodland’s assessment fell under an older process.”

Under the old assessment schedule, a fire department is assigned a fire suppression class grade, with lower scores reflecting better ratings. The criteria are based on response time, the number of people available, equipment and water supply.

“The new schedule places more emphasis on training and personnel readiness,” Dahl said. “We know that departments have trouble with their communities because of the rating system, and it’s possible that in the case of Hoodland, the department was re-evaluated under the old schedule.”

Hoodland Fire Chief Mic Eby had more direct language for the ISO method.

“They’re inconsistent, and they’re out on the East Coast,” Eby said. “And they didn’t even go out to Government Camp to do their assessment there, and they gave them a 10. In our case, we’ve increased our training, we have more fire hydrants and two new engines, and we got penalized for it. Actually, the insurance customers got penalized.”

Dahl said part of the reason the division has delayed acceptance of the ISO assessment is because it is working with the Oregon Fire Chiefs Association to create a more cooperative process for such assessments

“We’re working with ISO to get more transparency for the fire chiefs association,” said division spokesperson Cheryl Martinez.

Why and how is ISO

an influence?

The Insurance Services Office is a company that analyzes risk and evaluates situations for different aspects, and establishes the basis for rates, known as loss cost. Insurance companies choose whether or not to use ISO assessments to set their rates. The state of Washington has a legislative action that mandates Washington survey information.

“We could do the same thing here,” Newell said. “Interestingly enough, the Washington surveying and rating service is a registered service in Oregon and can do business here.”

Given this flexibility, the larger question is whether home and business owners can seek a second opinion for their loss cost assessment. Dahl said that option lies in consumer choice.

“The second opinion would be to go to another insurance company to get another quote,” he said. “Most customers look at total price, and it may or may not be lower. State Farm conducts their own assessments, so you can go with State Farm if their rate is better.”

To help consumers better understand their rate changes, the division has established a consumer help line to answer questions. Concerned policy holders may call 888-877-4894 to speak with an insurance advocate.

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