# ISO Rating for Building Department Affects Insurance Rates



## jar546 (Aug 11, 2019)

One thing for sure that not many talk about is how insurance rates may vary within the same county or region based on the score the building department gets for that particular zip code.  Here is some info:

The Insurance Services Office (ISO) is a leading source of information about risk. They supply data, analytics, and decision-support services for professionals in many fields, including insurance, finance, real estate, health services, government, and human resources. Their products and services help customers measure, manage, and reduce risk.

The Building Code Effectiveness Grading Schedule (BCEGS) assesses the building codes in effect in a particular community and how the community enforces its building codes, with special emphasis on mitigation of losses from natural hazards.

The concept is simple: municipalities with well-enforced, up-to-date codes should demonstrate better loss experience, and insurance rates can reflect that. *The prospect of lessening catastrophe-related damage and ultimately lowering insurance costs provides an incentive for communities to enforce their building codes rigorously especially as they relate to windstorm damage.*

The anticipated upshot: safer buildings, less damage, and lower insured losses from catastrophes.

The BCEGS program assigns each municipality a BCEGS grade of 1 (exemplary commitment to building-code enforcement) to 10. ISO develops advisory rating credits that apply to ranges of BCEGS classifications (1-3, 4-7, 8-9, 10). A grade of 98 is given if a community refuses to participate in BCEGS.  ISO gives insurers BCEGS classifications, BCEGS advisory credits, and related underwriting information.


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## TheCommish (Aug 12, 2019)

I throw them out of my office, since they penalize us for not adopting the lates version of ICC, we have no control over the edition of the code we are using, that  is set by the State.


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## mtlogcabin (Aug 12, 2019)

Late last year they were here and dinged us and we went from a 3 to a 5 because we are still under the 2012 editions because like you the state has to adopt the new codes before we can. I appealed and received a letter that when we do adopt the 2018 to send them a copy of the ordinance and they will reclassify us.

I don't know if it makes difference or not in insurance rates, but I do use the ISO BCEGS as a reason to keep my training budget high so we can send 2 or 3 people to EduCode every year and to other out of state training seminars.


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## JCraver (Aug 13, 2019)

Haven't we talked about this hoax before?

Here's a challenge for you all - call the insurance agents in your town, then call the companies those agents represent.  Report back how many of them have ever even heard of the BCEGS.  Then, weep over those many hours you're wasting trying to score better numbers on a rating system no one has heard of and no one uses....


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## fatboy (Aug 13, 2019)

I would like to tell them to pound sand, but my boss and City Manager buy into it...…..


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## Pcinspector1 (Aug 13, 2019)

fatboy said:


> I would like to tell them to pound sand, but my boss and City Manager buy into it...…..



Same here


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## mtlogcabin (Aug 13, 2019)

Then use it to your advantage to hire more inspectors/plans examiners, create a training budget, wherever they ding you, use it to justify expenditures you will need to improve your department. Permitting software, inspection software, I-Pads and smart phones to aid in documenting inspections in the field and incorporating them back into the permit software.
I have watched fire chiefs do it during the budget process and get what they need/want using the need to improve or maintain their ISO rating as justification for their proposed budget expenditures.

I started doing the same thing and it worked because the city manager agreed pitching it to the elected officials this would save the voters money on their homeowners insurance. 

Am I a proponent of ISO ratings for building departments? No, I have done hundreds of insurance inspections for dozens of different national companies and none of them asked for a building departments ISO rating on their reports. Half of them did ask for the FD ISO rating


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## Pcinspector1 (Aug 13, 2019)

The FD rating seems to find it's way to the media. "Local Fire District gets a number 1 rating!" They just bought a new pumper truck and hired four new FF's.

How come the inspection department's only a 4?

Budget!


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## VillageInspector (Aug 20, 2019)

I just went through the ISO wringer and in the close out letter I received it states that the rating is only applied to new commercial properties which in my case potentially affects one property. Total waste of time.


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