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Chatham Fire Marshal explains recent fire insurance rating changes

Posted Thursday, November 10, 2011

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Pittsboro, NC - A recent review by the N.C. Department of Insurance to more accurately assess fire insurance ratings in Chatham County has led to increases in fire insurance costs for some residents in the county located farther away from fire stations, said Fire Marshal Tom Bender in addressing the Chatham County Board of Commissioners on November 7. The issue primarily impacts a few small areas in the county.

“It is very important for people to know that regardless of their insurance rating, they will have fire protection services. This is an insurance premium, not a fire department protection issue,” Bender said. “For a few households, their insurance coverage costs may go up or they may need to find a different insurance agency, but they should know that fire departments will respond to fire emergencies in their homes.”

As has happened in other counties, the rating changes were triggered by a request to the Department of Insurance to investigate ratings across the county used to determine fire insurance premiums, Bender said. “The county did not request this investigation. A few local insurance agents who felt that there was a problem asked for an investigation and, in some cases, there was a problem.”

During this review, new digital mapping more accurately pinpointed distances of homes from fire stations. The review also identified areas that had been incorrectly assigned ratings by zip code rather than actual road mile distance. The state currently uses the same definition of “road miles” throughout the state and it is based solely on road distance, not response time nor terrain.

Bender said that the end result is that some residents have learned that their property has been reclassified to the more costly Class #10. “They are understandably upset about premium increases or the need to shop around for a different carrier that will cover them. I just hope that they will understand that this is out of our control and that fire departments will always respond to their fire-related emergencies.”

The Class #10 rating usually means that the residence or other structure is more than six road miles from a fire station, a range set by state law. “However, other important factors can also impact the rating, including fire department equipment and staffing, access to water supply and fire emergency dispatch and response,” said Bender.

Many areas in North Carolina have a Class #10 rating due to large fire protection coverage areas, according to Bender. “Only two municipalities in the state have the top rating Class #1, because so many complex factors go into the rating.”

Bender said that the challenge for the impacted areas in northeastern Chatham County is that county does not have a automatic aid agreement with the Town of Cary’s Fire Department, because the department is not set up to serve rural areas. Some of these areas do not have water hydrants.

All the fire departments located in the county have automatic aid agreements in place that allow them to serve residences in other districts. Bender said that this allows many residences located within five to six miles from a fire station to receive a rating of Class #9E, instead of the more costly Class #10. “Our departments are all organized and equipped for to provide rural fire protection service.”

The Board of Commissioners asked staff to initiate discussions with the Town of Cary, but access to water supply would need to be addressed.

“We do have some positive things happening already that would improve ratings for other residences in the county,” said Bender. “A new turnaround lane on US 64 just east of Jordan Lake and a new fire station planned for Pittsboro will have a positive impact on ratings for residents in those areas.”

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Chatham Fire Marshal explains recent fire insurance rating changes

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