Lower insurance rates could be on way

Aug 27, 2008 (Jacksonville Daily Progress - McClatchy-Tribune News Service via COMTEX) -- ISSO | Quote | Chart | News | PowerRating -- Aug. 27--Jacksonville officials said Tuesday they are hopeful a survey of the city's water system will show infrastructure improvements that will result in a lower insurance classification for the city -- and lower rates for residents

A representative from Insurance Services Office Ltd. was in town Monday and Tuesday conducting an analysis of Jacksonville's infrastructure. The city's last insurance survey was done in 1996.

According to Fire Chief Rodney Kelley, ISO is the rating agency which makes recommendations to the state's board of insurance regarding municipalities' insurance rates.

"A city's rating is on a scale of one to 10, and as far as insurance is concerned, a lower classification is a good thing. A rural area with no fire department within five miles would have a classification of 10," Kelley said. "We are currently a 6, and we are hoping to get it down to a 3 or a 4 following this survey. That would be a significant decrease in insurance rates for our citizens."

The ISO agent has spent the last two days inspecting equipment, evaluating water lines, testing fire hydrants and speaking to city personnel.

Kelley said he is "pretty confident" the city's rate will decrease "to some degree" following the new survey, due to the amount of effort the city has put into improving its water system.

"The inspector said the water improvements we have made are pretty much one classification point in themselves. Two of their recommendations back in 1996 were an above-ground storage tank for the northern portion of town and a ladder truck, and we now have both of those things," he said. "We have increased the size of our water mains; we have added fire hydrants; we have replaced old hydrants; and we have increased water supply in many areas of the city."

The city's training programs, an expanded dispatch department and use of the CodeRED emergency notification system will also have a positive impact on the ISO recommendation, Kelley said.

In the coming months, city officials will receive a copy of the letter of recommendation from ISO, notifying them of the survey's findings. When the Texas Department of Insurance makes its classification decision, the city will then have the choice of either accepting or contesting it.

If happy with the classification, the city will send back the decision and the state will implement it, which could be completed by the start of the next calendar year. However, if the city wants to contest the rating, another survey would need to be done, drawing the process out further.

"Individual residences will benefit from a lower insurance classification, but businesses will especially benefit from our rating going down. Lowering our insurance classification is absolutely a powerful economic development tool to help draw new companies to town," Kelley said.

While it is currently unknown how much a classification drop will save businesses and citizens on insurance costs, the city said the decrease would likely be "significant."

City Manager Mo Raissi spoke with the ISO agent Tuesday, and he said all indications seem to point toward a positive evaluation.

"In talking with the inspector yesterday, he was very impressed with the city staff and with the improvements we have been able to make," Raissi said. "Since the last survey, the issues that we needed to work on have been improved, and hopefully that will mean a much lower insurance classification for the city."

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