Versailles's fire protection ratings drop from 4 to 2
Depending on whom you ask, a drop in the Insurance Services Office (ISO) rating for the city of Versailles means a great deal - or very little. Last week, Versailles Mayor Brian Traugott sent a letter to owners of 25 of the city's most valuable structures notifying them of the city's ISO ratings drop from four to two, effective Aug. 1. The letter briefly explains the components of the ISO rating: 50 percent for the fire department (training, equipment and personnel), 40 percent for the water supply (including flow pressure and fire hydrants) and 10 percent for the city's 911 system and dispatchers. Traugott wrote, "In general, the price of fire insurance in a community with a good PPC (public protection classification) grade is substantially lower than in a community with a poor PPC grade, assuming all other factors are equal. ." The letter closed, "We wanted to share this good news with you so that you can inquire with your carrier about any potential insurance savings ." Courtney Roberts, a Kentucky Farm Bureau Insurance agent since 1998, said the lower rating doesn't necessarily translate into lower rates. "It is a variable because, home insurance rates for instance, may be one band of rates versus rental property, etcetera, so protection classes may impact one line of business differently than they do another line of business," Roberts said. "I would never want to come out and say, 'Hey, property insurance rates are going to go down by five percent.' Well, that could be the case in the homeowner line of business but the rental properties, that's a whole different set of business ." Other factors determining insurance rates include the age of the building, what it's made of and its distance to the nearest fire station. Roberts said when he worked in Shelbyville, the city's fire chief announced publicly that an ISO drop there would translate into a 10 to 15 percent cut in fire insurance premiums. Afterwards, Roberts and his fellow agency employees spent weeks fielding calls from policy holders looking for rate cuts. "I couldn't even get my job done," Roberts said. "When people hear 'lower and cheaper,' they automatically think, 'Well, a four went to a three or two. Is my insurance going to go down by half?'" At a May 2015 Woodford Fiscal Court meeting, Magistrate Ken Reed (Dist. 4) announced that one portion of the county had seen an ISO drop from nine to eight and another area from seven to five. Reed said the rating drop would save some property owners a few dollars on insurance - and Roberts said it did. "A nine to an eight is a pretty decent drop in insurance premiums. A lot of my clients saved a lot of money. Seven to a five, that bandwidth - just like a four to a two, is not as significant in premiums. Could it be a savings? Yes, but it's not as significant. . That's really hard to explain to the public, quite honestly, unless I get into 45-minute conversations with each individual person ." Roberts said. If the effect of the city's ISO drop on insurance rates is negligible and hard to explain, it is good news for officials trying to lure new businesses and industries. "I think it has a much bigger impact on an industrial plant than it does on a homeowner's insurance," said John Soper, chairman of the Woodford Economic Development Authority (EDA). Soper said when local officials first met with the owners of More Than A Bakery, they were concerned about the city's ISO. ". I was in Brian's (Traugott) office today (Friday) when he got a reply back from Mr. Quigg (company president Bill Quigg) that he was very pleased that we'd come through on what we thought was going to happen regarding getting that lowered," Soper said. Soper also said the ratings drop could make it easier to recruit new businesses, again citing the example of the bakery, which will eventually employ more than 300 workers. "I think it will, because . when More Than A Bakery (first) met with us, they kind of caught us off guard, that it was one of the things they brought up very early in the conversation, their concerns over our ISO rating. And we assured them that we had preliminary information that it was going to go down, and so they gave us the benefit of the doubt. So I would have to think from that it's a big concern," Soper said. Soper noted that the $57.1 million bakery facility will use gas to make crackers and other products, and much more of it than a typical home or business. "From that standpoint, response time (to a fire) makes a big difference, whereas in a bunch of homes, you're going to have $100,000 here, $250,000 there, etcetera, etcetera, and response time is part of it, but it's not as much as a bakery that's got a big gas line coming into it ." Soper said. Perhaps lost in the discussion of insurance costs and industrial recruitment is the fact that independent experts examined Versailles and decided the city is more prepared to prevent or fight fires than it used to be.
In an article in the Aug. 25 version of The Sun, we incorrectly identified the company Courtney Roberts is employed by. Roberts is the agency manager for Kentucky Farm Bureau Insurance in Versailles. We regret the error.