Statements from Community Mitigation for ISO, State Farm Insurance

Robert Andrews, Vice President of Community Mitigation for ISO, provided in part, the following statement:

"ISO is not aware of any changes to the 5 mile radius criteria. ISO considers the process and outcome of the PPC evaluation as a proprietary work product. A summary report is provided directly to the community being evaluated and classifications are provided to participating insurers. The specific community or carrier in question can be contacted and they can provide information if they choose to.

"Insurance companies that license ISO's services can choose to file and use ISO's PPC classification or they can file their own classification with the department of insurance. Insurance agents are obligated to classify and rate policyholders in accordance with the insurance company's filed classification. ISO does not monitor the use, non-use or modification of its advisory information in South Carolina or other jurisdictions.

"Virtually all property insurance companies license ISO's advisory services. Insurers that license ISO's services can choose to use, not use, or modify ISO's data as part of their company-specific rating plans. ISO does not monitor how individual insurers use its advisory services.

 "Properties that are over 5 road miles from a recognized fire station would be a class 10. As ISO provides advisory services and does not set rates, the reporter should contact insurers writing policies in the state to determine the potential rate impact.

 "The ISO Fire Suppression rating schedule evaluates a communities structural firefighting capabilities, therefore stand-alone EMS stations would not be considered when evaluating  a community's rating.

 "Since ISO is an insurance advisory organization providing insurers with a variety of underwriting and rating services, we are not in a position to comment on how insurance carriers price and underwrite for their individual policyholders."

In a statement, State Farm Insurance Company responded:

"State Farm relies on a number of factors, including ISO ratings when determining premiums for SC homeowners. Some of the factors include past claims history of an area, the material that the home is constructed of, rebuilding costs, medical payments and other variables. A significant change in ISO ratings would impact premiums, but it is impossible to predict the specific impact. However, over time if there were a change in the quality of service provided it could impact premiums.

"As a mutual company owned by our policyholders, State Farm encourages high quality protection services to protect our customers, and to help keep premiums low. There are ways that homeowners can seek discounts in order to help counter changes beyond their control and keep premiums lower. One way is to multi-line, or buy multiple policies such as home and car coverage through State Farm. Other ways in which discounts may be available include going to a higher deductible and installing safety devices such as an alarm and dead bolt locks."

A breakdown of PPC ratings in South Carolina can be found at

Background Information On ISO's PPC Program:

Links to the ISO Mitigation site, with PPC information —

Links to two PPC studies:

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