Fire Insurance Reclassification Could Help Property Owners, A Little

By: Alan Pollock

Topics: Fire

Peter Connick, Chatham's new fire chief, outside the department's new station on Depot Road. FILE PHOTO

CHATHAM According to the insurance industry, Chatham is more fire-resistant than ever before. And that could translate to savings on home and commercial insurance premiums, though modest ones.

The Insurance Service Office rates communities on a scale of one to 10, based on a host of factors that judge fire preparedness and suppression ability. Like most municipalities in the country, Chatham had been rated Class 5, but recent improvements in the department allowed the rating to jump two levels to Class 3.

“We're in a small number. Most places in the country are fives, sixes, sevens,” Fire Chief Pete Connick said.

The improvement isn't related to any one factor. “It was a whole bunch of things,” he said. An evaluator visited the town and reviewed firefighter training, water delivery, fire prevention efforts, equipment, staffing level and facilities.

The department's increased staffing, sought for the purpose of keeping up with the increase in ambulance calls, also benefited fire readiness. Last year, voters approved hiring a new firefighter, bringing each shift up to six people. “We also really ramped up our fire training program,” Connick said.

The average homeowner is likely to save around $50 a year, Connick said. But because commercial insurance is more expensive than residential policies, the savings for businesses is larger, he added. The chief advised property owners to call their insurance agents to inquire about the savings.

Alan Long of Eldredge and Lumpkin Insurance Agency warned policyholders against expecting a windfall, since on Cape Cod, around 60 percent of the cost of premiums is there to cover the cost of wind damage from storms. Factored in with risks like lightning, vandalism, theft and the like, the savings from better fire protection are limited, Long said. Some companies might eventually provide policyholders with a two-percent credit.

“Some companies aren't going to change the rates at all, initially,” he added.

In Eastham, where the town water system and fire hydrants are being expanded, homeowners are jumping from a Class 9 to a Class 5 or 4. Those policy holders may receive a 15 to 20 percent credit, depending on the insurance company, Long said.

“For them, there's significant reduction,” he said.

Commercial properties in Chatham will likely to see more savings from the reclassification, but for most, the rate relief will not be that significant, Long said.

For homeowners looking for lower rates, a better approach might be to have a storm shutter system installed. But those systems can be costly, Long noted.

The town's investment in fire apparatus and a new station was a key factor in the classification, Connick said. With modern capabilities and room for expansion, “you're not limited going forward,” he said. The insurance evaluator credited the department for its new tower ladder truck, known as a quint, since for many years the town lacked any kind of a ladder truck. The department also received credit for two new pumpers, which are expected to be delivered, outfitted and put in service before Jan. 1.

Nationally, only 3,409 fire departments have achieved a Class 3 rating. If Chatham had either a dedicated dispatcher or an additional firefighter on each shift, or had staffed the South Chatham substation, the department's rating would have been even higher.

“We were a hair's breadth from getting a Grade 2,” Connick said.