This site is not associated with, nor does it represent the views of any particular fire department.
It also has no association with the ISO.
The use or application of the ISO rating system varies all over the country.
Check with your local fire department, or the ISO, if you have any questions.

ISO Ratings and the Fire Service

ISO - Insurance Service Office - This is a, for profit, organization that provides statistical information on risk. For many years the "ISO Rating" had a large impact on most fire departments. The ISO (PPC) rating is from 10 - 1. With "1" being the best. At one time, almost, all insurance companies calculated rates based upon the ISO rating. ISO would come to your city and assess a Public Protection Classification. They would then sell this data to the insurance companies. Just about every aspect of a city and a fire department was evaluated in determining the ISO rating. They would give points for everything from the training aids a fire department owned to the distance between fire hydrants. ISO wanted fire departments to conduct 20 hours of training per man, each month, in order to maximize points for every training aid. Historically, very few cities ever received a "Class 1" rating. There have been times where only one city, out of the nation, would receive a "1". Presently there may be as many as 40+ cities with a "1" rating in the U.S. This is still a small percentage when one considers the thousands of communities nationwide. There is little incentive for a community to strive for a "1" rating since the step from a "Class 2" to a "Class 1" results in little or no difference in homeowner rates. When a city does get a "Class 1" rating they will often proudly display it on their patches, apparatus or website.

But now ISO ratings might have very little, if any, effect on insurance premium rates in many states. Some insurance companies have discontinued purchasing ISO data and using it to calculate rates. Instead of using a theoretical risk evaluation they have opted for a system where they use the actual loss within a zip code. (This includes all losses due to fire, flood, lightening, hail, etc.) After an article, a few years ago, on the subject, in an International Association of Fire Chiefs newsletter about how State Farm Insurance had decided to go to a "subzone" system in several states, State Farm was contacted. State Farm told me that they felt that they were one of the last companies to go to the zip code method of calculating premiums. They thought that most smaller companies had adopted this prior to them. State Farm is the largest homeowner insurance company, in the U.S., and writes over a third of all homeowner policies in many states with a 20% average nationwide.

As of 2001 State Farm has abandoned the use of ISO in Illinois, Texas, Oklahoma, Pennsylvania, Arizona, Minnesota, Nevada, New Mexico, Vermont, and Wisconsin in favor of the Subzone Rating Factor System. They have plans to do so in other states. (See magazine articles link.)

Update: The Texas Department of Insurance now has a FAQ page about ISO.
Here is what they say.

"What does the PPC system mean to me?"

"Every city, town or area that provides fire protection services is subject to being graded to establish a PPC. Individual buildings -- including your house -- are subject to the community's PPC. When calculating property insurance premiums, insurance companies using the PPC apply a factor that reflects a particular community's PPC."

"Do PPC ratings vary from company to company?'

"Yes, it can, because some insurance companies do not use ISO."

In some states the insurance companies can use a host of other factors to determine your insurance premium. Some companies will place a great deal of influence on your credit score. (Another reason to improve your score as much as possible.)

Keep something in mind as you consider the effect of ISO in your area. Insurance is something often highly regulated by individual states. While State Farm has abandoned the use of the ISO, Public Protection Classification (PPC) rating in many states, they may not be allowed to do so in others. A few states have successfully stopped State Farm from implementing the new system. (i.e. Louisiana and North Carolina) A few others have tried to fight State Farm's desire to change. (Arkansas) The state of Georgia requires all insurance agencies to consider ISO ratings in setting premium rates.

In many cases it is the fire associations or fire chiefs who are fighting this change. The perception might be that dropping the use of ISO ratings system hurts fire departments. Many departments, especially rural ones, use the structure of the ISO rating system as a way to justify resources in budget discussions. ISO rates everything from the amount of fire apparatus to the age of it. You can get points for very specific types of training equipment. Examples of this would be "cut-away" fire hydrants or pumps. Just about everything a fire department has, or does, is evaluated. Fire departments fear, that without ISO's influence, convincing cities to buy equipment, or hire personnel, will be harder.

But some chiefs believe that no longer depending upon ISO has made their job easier. They are now better able to paint a picture where more people or better equipment translates into lower fire loss. How well the fire department performs, which can be related to how well it is equipped, staffed and trained, directly affects insurance rates. Lower insurance rates could also mean more people and industry* might move to a city. Many city councils can now be made to see a value in having a good fire department. Fire prevention programs and better code enforcement can be an easier sell also.

*Note: In some states ISO ratings might still be used to calculate commercial insurance rates while zip code loss, or the "subzone" system is used for homeowners.

There are many states where ISO is still the predominant factor in setting insurance rates. But even in states where ISO is no longer used, many fire departments have continued to gauge their success by their ISO ratings. They often boast that an improvement in ISO / PPC rating will translate into a certain percentage rate of savings for the homeowner. Perhaps they just like having a yardstick by which to measure their success. Some may see it as bragging rights. But apparently, some may not know that this change has taken place. ISO is not spending time and money to let people know where the value or their services have been diminished. (Who would?) While it is possible that some insurance company might still use ISO in any state, it is not likely that even a majority, of homeowners, will see a reduction in premiums in a state listed above, if a rating is improved. You can find many fire departments, in the states mentioned above, who say on their website, that a better ISO rating = lower insurance rates. Some declare it emphatically. "...this means an approximate 14% reduction in homeowner’s insurance premiums" Others might just imply it. They may say something like, " recognized when home insurance rates are determined."

If anyone has more current information on ISO, please send it to me.


I did recently receive an email from a concerned retired N. J. Fire Chief.
His name and other information lead me to discover that he is probably very knowledgeable.
I emailed him back with my response and a request to use his name. I never heard from him again.
I figured my email ended up on his spam folder. Having said that, here is his comment and my response.

His name has been omitted.

"You need to update the ISO information. 9 out of the top 10 insurance companies use ISO's data, including State Farm."

That was the extent of the message I received. Here is my response. I have no idea if he every received it.

Dear Chief,

The information I have is that they “use” it, but it is a tiny part of their assessment.

When I contacted State Farm (in 2011) they told me that the factor that determines your actual rate the most, is your credit score.
As I am sure you know, this can vary greatly from state to state.

All I am after is accuracy. If you can send me some documentation, from State Farm, or whoever, I would love to pass that along.

Until then, may I put your email on the website for people to see?
I want to give them another perspective.
I would also like to tell the readers that you are someone who should know because of your experience and credentials.
Any more information you could give me is welcomed.

But here is what I currently have to support my position.

"Some insurance companies don’t use the ISO ratings in their calculations of premiums, while others use the ratings along with a number of other factors such as the age of a home and the type of roof.”
"With so many variables involved, it’s nearly impossible for consumers to predict how much money an improved ISO rating could save them, but they should be aware of any factors that might make a difference.”

Here is a another article:
"Keep in mind that some insurers, such as State Farm, don't use ISO ratings but instead rely on their own data to calculate fire risk."

I contacted State Farm (Texas) in 2011 about this subject.

I was told that State Farm divides a county into subzones beyond the 1-7 score and perhaps even smaller divisions than that, to determine your premium rate. They also (reluctantly) admitted that your credit score might be a huge factor in what you pay for insurance.

I called my State Farm agent who said that, in Texas, they did not use ISO, but rather their own internal system that divides up a county. But just to be sure, and get more details, they would contact their underwriters and ask the same questions. I was called back and it was explained that they DO NOT use ISO for homeowners insurance rate calculations. They use their own system which rates an area from 1-7. For example, regardless of the city of Dallas' ISO rating, it may have several different scores, depending upon the many regions the county is divided into. The small suburb I live in (in another county) has an ISO rating of 2, but a State Farm score of 1. They were a little guarded about how they determine their ratings, but they were firm about not using ISO.

I will concede that State Farm might use the ISO more in calculating commercial rates, but I don’t really know.

I know that Georgia requires insurance companies to use ISO to calculate rates. Does New Jersey do so as well?
Since the Texas Dept of Insurance website says that ISO is a NJ based organization, I would wager that it does.

A USFA /FEMA report from California said this:
"State Farm and other insurance companies have moved away from ISO rating. State Farm is the nation’s largest insurer of residential properties and stopped using the ISO rating in 2000.
State Farm developed its own system of determining rates using the five digit zip code system to reflect prior claim experience in that area (Kang, 2006).

Western Mutual Insurance Group described a method similar to State Farm, they based their premiums on losses and risks within a gi ven zip code area and the distance from a staffed fire station.
Premiums are lowest if a home is within 3 miles of a fire station.”

There is always a chance that ISO will have some relevance on a home insurance rate.
However this varies depending upon: situation, state, insurance company and more.
I have seen some unsubstantiated reports that in many states, not only does State Farm not use ISO to any serious degree, but neither does Allstate and others.

The Texas Department of Insurance website only says, over and over, "some insurance companies do not use ISO.”

I also base my claim, that ISO has little to do with most homeowner’s rates, on the fact that in many communities, State Farm writes over half the policies.
My local FD went to the city council and asked for more stations and equipment because this would improve our rating.
Was that true?
Would going from a 2, to a 1 change anyone’s rate?
Given the fact that every person on the council had State Farm, I would say that the statement was false.
(Of course I didn’t mention that to anyone other than the chief, who was a friend of mine.)

I will certainly contact State Farm again, to see if anything has recently changed.

Thank you for your interest in keeping me honest.

Here is an article from an insurance business website.

2001 Article in Firehouse Magazine about State Farm's change, with more details on the PPC and ISO rating system.
It also talks about the "Subzone Rating Factor" system.
NOTE: Apparently Firehouse has moved the article
and this link no longer works.
If someone finds the article, please email me the correct link.

The same story can be found at this "Fire Chief Magazine" link.

In 2001 Arkansas tried to fight State Farm's change to the "loss per zip code" system.

Website with a great deal of information on ISO and the PPC.


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