Insurance premiums influenced by El Dorado Fire Department budget

EL DORADO — With the city’s fire department staffing and shift minimum at an all-time low, a by product of this could be higher insurance premiums for the public in and around the city, an official said.

“From a fire department’s standpoint, we want a low insurance rating because it saves citizens money so they can put it back into our economy instead of spending it on premiums,” Fire Chief Chad Mosby said.

About every five years, fire departments are rated under the Insurance Services Office program called the Fire Suppression Rating Schedule, and communities can score between 1 and 10, with class 1 being the best and class 10 being the least.

The fire department’s ISO rating is used in determining a person’s homeowner or commercial insurance premium; the percentage is small in comparison to the individual’s credit score, but it would be affected, said George Fennell, Shelter Insurance agent.

“It would be a terrible thing for insurance premiums to go up higher than they already are because of fire department evaluations,” he said.

ISO public ratings are determined by three areas: 10 percent covers the efficiency of emergency communications, 40 percent covers accessibility to the nearest fire hydrant, and 50 percent covers the local fire department, such as training, geographic distribution of firehouses, fire equipment adequacy, and staffing.

Since being evaluated in 2012, the El Dorado Fire Department received a class 3 rating and “we had room for improvement,” Mosby said.

The next scheduled evaluation for the city’s fire department is approaching; Magnolia and Norphlet ratings were updated recently.

“From what I’m told, ISO is working now,” Mosby said. “But they have not notified us when they’re ready to grade.”

There are ISO grading systems for fire departments based on if it’s a full-time, combination, or a volunteer department. The El Dorado Fire Department has a full-time staff that can cover incidents in the city, and assist outside of the city.

All the fire departments in Union County have a mutual-aid agreement in case they need assistance, which can help a department’s ISO rating, said Dewayne Worth, Lawson-Urbana fire chief.

“ISO looks at fire reports, equipment, response times, they look at everything,” he said. “If a department doesn’t have a lot of points, the mutual-aid agreement can be beneficial to their rating.”

The Magnolia Fire Department has a combination of volunteer and paid-staff covering a

population of about 11,000, and its last rating was a class 3-X, from an evaluation three months ago, Fire Chief Greg Pinner said.

For about 38 years, Pinner has worked for the Magnolia Fire Department and has seen the ratings get better from class 7, to 5, to its latest.

The Norphlet Fire Department has a full volunteer staff covering a population of 800 and its rating is a class 3, Fire Chief Wesley Harper said.

From the insurance company’s side, the public’s assigned ratings are generally determined by these zoning factors: if the residence is within 5 miles of the nearest fire station and 1000 feet from the nearest fire hydrant, the house or business has that fire department’s rating. Any residence outside of that radius, or over 1000 feet from a hyrdant has between a 9 or a 10 rating, both fire chiefs said.

Some insurance groups, like Shelter Insurance, have got around this by assigning a public rating for people based on the residential zip code’s fire station, not the nearest zone.

Since El Dorado’s fire department does respond to fires outside of its radius zone, insurance companies allow homeowners to use it’s rating to have the smallest premium possible. Therefore, if the El Dorado Fire Department rating increases, this would affect insurance rates for people in and around the city.

Greg Gordon, an ISO field representative who has tested fire departments throughout Arkansas, met with Harper two weeks ago for Norphlet’s evaluation, the results of which are pending, but Harper is optimistic the town will keep its 3 rating. Before Gordon left he meant to call El Dorado’s department about an evaluation, Harper said.

According to Gordon: “I could have let El Dorado know I was in town,” Harper said. “We were due and so was El Dorado.”

A city financial meeting was scheduled for Mar. 17 to discuss the fire department, but has since been canceled, due to conflicting members’ schedules.

Willie McGhee, alderman Ward 3, attended the financial meetings at the end of the year and didn’t agree with the decision to pull more money from police, fire and public works, especially when there’s about $10 million in the city’s reserve.

“We are not a bank; that’s tax payers’ dollars. If we get into crunch time, we should dip into the reserve for our employees instead of cutting back on staff,” McGhee said.

Billy Blann, alderman Ward 1, also attended the meetings and confirmed that city services did what they were told to do — cut the budget, but in cases of emergency the city has reserve funds

“Mosby is a good man, and if he says we’re not safe, we’re going to provide him with the money he needs,” Blann said. “At the time, I wish we could have looked at things a little closer.”

The question: Will the El Dorado Fire Department’s ISO rating increase is “indeterminable, with the new ISO system, it could get better,” Mosby said.

The fire station’s equipment is up-to-date and response times are efficient, however staffing is low and some days they run 24 hours without a break, but most cases they aren’t overly stressed.

When it was last graded, minimum staffing per shift was 13 with an average of 15-16 people showing up at a fire. Now the maximum staff per shift is 15 people with a minimum of 12, which would be a factor in determining the future price of insurance premiums for a city with the population of 18,000.

Nathan Owens can be reached by phone or email: [email protected].

For news updates follow him on Facebook or Twitter: nowensednt.

Upcoming Events