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Mike Ericson From: Harlan Lundstrom <harlan.lundstrom@centennialfire.org> Sent: Friday, January 27, 2017 12:09 PM To: Patrick Antonen; Mike Ericson Subject: ISO Administrators; This is what I have found so far on ISO. I think we have enough information to move forward with a plan. Insurance Federation of MN — I spoke to the VP of Public Affairs which I have known for years. He said credit scores for home owners is a big factor in determining insurance rates. On Home owners, going from ISO 5 to a lower rating gets 4% reduction, going up in ratings was only impacted when above an 8. He was still waiting to hear back on commercial properties. Insurance Brokers — waiting to hear back. LMC — (This is probably the most significant information) We were able to estimate the effect the change(s) in ISO class would have on the LMCIT property premiums for the Centennial Fire District, the City of Centerville, and the City of Circle Pines. For all three, changing from class 5 to class 4 results in an estimated 11% premium decrease. And for all three, changing from class 5 to class 6 results in an estimated 12% increase. In dollar terms: I recalled this article from a few years ago, when the City of Carver had a fire protection class change. The reported quoted a local agent who indicated: "Going from [Class] 6 to a 4 is not going to change anything [in insurance premiums]," said Marvin Bjugan, a principal of Carver Insurance Group, an independent insurance agency at 212 Broadway in Carver. "The reality is anything 1-6 and often times 1-7 all get the same rate," Bjugan said during an interview." http://www.swnewsmedia.com/chaska herald/news/carver-s-fire-service-rating-improves/article 561eda0e-176a- 501f-a 171-Ofc42f72d 5f7. htm I I spoke with Progressive Insurance, they do not use ISO to determine rates. Responses from Fire Chiefs I received; • Unfortunately that is a fairly illusive thing. When I was presenting to the City Councils here, I used a 3-5% number (per rating change) which was based off of prior research, however, that number is only for commerce occupancies. Residential occupancies are only significantly affected if the rating goes from a 9 or 10 to a 4 or don't have any exact numbers, only estimated. Unfortunately, ISO won't give an exact answer. Some home 72 premium property p p estimated estimated Member (protection class 5) premium at premium at protection class 4 protection class 6 Centennial Fire District $344 $308 $384 City of Centerville $16,541 $14,790 $18,487 City of Circle Pines $18,201 $16,274 $20,342 I recalled this article from a few years ago, when the City of Carver had a fire protection class change. The reported quoted a local agent who indicated: "Going from [Class] 6 to a 4 is not going to change anything [in insurance premiums]," said Marvin Bjugan, a principal of Carver Insurance Group, an independent insurance agency at 212 Broadway in Carver. "The reality is anything 1-6 and often times 1-7 all get the same rate," Bjugan said during an interview." http://www.swnewsmedia.com/chaska herald/news/carver-s-fire-service-rating-improves/article 561eda0e-176a- 501f-a 171-Ofc42f72d 5f7. htm I I spoke with Progressive Insurance, they do not use ISO to determine rates. Responses from Fire Chiefs I received; • Unfortunately that is a fairly illusive thing. When I was presenting to the City Councils here, I used a 3-5% number (per rating change) which was based off of prior research, however, that number is only for commerce occupancies. Residential occupancies are only significantly affected if the rating goes from a 9 or 10 to a 4 or don't have any exact numbers, only estimated. Unfortunately, ISO won't give an exact answer. Some home 72