Fire Safety Ratings Slide to a New Low, Insurance Costs Up


As insurance bills make their way into the post office boxes in West Tisbury this month, homeowners are facing some steep premium hikes.

The increases - reported to be as low as eight per cent and as high as 100 per cent - come less than two months after the town's fire safety rating dropped to the lowest possible score.

"This is a real problem and the most significant impact on insurance [rates] this year," said Robert Mone, owner of Mone, Lawrence & Carlin Insurance Agency Inc. in Vineyard Haven.

"We're getting more and more calls all the time as people start getting their bills," he added.

The fire safety rating system - handled by Insurance Services Office (ISO), an agency which evaluates and classifies every fire department in America - offers a guide to private insurance companies for risk assessment. West Tisbury's marks dropped from a rating of 9 to 10 this spring, and insurance companies are translating this new mark into inflated premiums.

"Class 10 means we don't recognize the level of protection. Citizens can interpret this as being inadequate," said David Dasgupta, spokesman for ISO.

The rate drop, West Tisbury fire chief Manuel Estrella III said, comes after ISO representatives notified the department that their method of response to fire alarms did not satisfy their requirements to maintain a 9 rating. When the department receives word of a sounding alarm, the fire chief and a police officer alone respond to assess whether or not there is an actual fire, before alerting the entire volunteer department. Of the 90 smoke alarm calls from last year, none turned out to be actual fires.

But ISO demands that at least four firefighters, their equipment and an engine report to the scene within five minutes when an alarm sounding is reported.

"Fire protection class is very significant [for insurance companies.] If your house is being protected by a fire alarm that you purchase, and [the fire department] doesn't go, what good is it? There is no response as far as they're concerned," Mr. Mone said, a West Tisbury resident whose own home insurance increased $400, up nearly 50 per cent.

The fire chief didn't anticipate the rate change would work its way into homeowners' bank accounts so severely.

"I was told it wouldn't make that much difference," Chief Estrella said.

The West Tisbury method of response is not unusual on the Island. Tisbury fire department has been responding to alarm calls with a team of four just over the past year. Edgartown's department just recently began the practice as well. Other towns have not, as of yet, implemented this full-response system.

Down-Island towns are also blessed to have town water, which allows them to satisfy a "water under pressure" ISO requirement. The highest rating West Tisbury, Chilmark or Aquinnah could hope to receive, without town water or hydrants, is an 8.

It remains to be seen whether or not other towns will experience rate drops in the coming year.

The West Tisbury department, under the direction of selectmen, set a new policy beginning this past Monday to respond to alarms according to ISO's criteria. As of yesterday, the department had yet to try out the new response method; no alarm calls made their way into the dispatch center.

Calling his volunteers out in the dead of night to respond to a false call is not an appealing option, the chief said.

"Getting up at two o'clock in the morning is hard. Even if you are only gone a half hour, it takes you two hours to get back to sleep. They're volunteers. They'll get worn out," Chief Estrella said. He now has an on-call schedule in which only the four volunteers on duty will hear the page. The town will compensate those on call.

"We're trying to work it out so no one gets burnt out," he added.

Shifting to a full-time, paid fire department is not an option town leaders are ready to entertain, said John Early, chairman of the West Tisbury board of selectmen.

"It doesn't need to come to that. That is by no means indicated by the circumstances," said Mr. Early, who speculates that a paid department would force another $1 million annually onto the backs of taxpayers.

But even with this new response policy in place, ISO requires at least 12 months of this practice, complete with documentation to prove it. Whether or not home owners' premiums would fall with a fire safety classification improvement remains to be seen.

"I don't think it will go back down. They say it levels out, but I'm doubtful," Chief Estrella said, noting that the town's rate may improve to an 8 once the department's new equipment arrives this summer - a truck capable of pumping 250 gallons a minute for over two hours, another ISO requirement for rate improvement.

These faltering classifications, insurance industry insiders say, could have more severe impacts - forcing some of the already limited number of companies willing to ensure Island homes out of this market.

Potential flooding and hurricane damage in this coastal zone makes insuring Vineyard homes a risky venture for insurance companies, and it limits which ones will offer insurance here.

"If you live near the coast, you could have one choice. If you live inland, you could have four to five options. If it's over $1 million, you'll have two choices," said Steve Schwab, vice president of Martha's Vineyard Insurance Agency.

Mr. Mone is particularly concerned about the staying power of the two companies willing to take on homes valued over $1 million.

"They could easily decide to pull out," Mr. Mone said.

It's an unappealing market for insurance companies, Mr. Mone said. Barnstable Mutual Insurance, a small outfit on Cape Cod, stopped accepting new clients. Realizing that 15 per cent of their policies were on the Vineyard, the company thought that concentration was too risky.

Massachusetts Fair Plan - a pool of insurance companies for coastal communities which are willing to share the risk for homes in these flood zones - only covers homes valued under $1 million.

Insurance companies, from health to life to liability policies, are already searching for any way to boost premiums as they brave a bad economy. And the industry - fractured after the magnitude of claims following Sept. 11, 2001 - continues to recuperate from that jolt.

"We're seeing dramatic increases in insurance premiums across the board," said Mr. Schwab.

Mr. Schwab said that homeowners would have experienced rate increases this year, regardless of West Tisbury's fire safety rate change.

"Most of the increases people are seeing are economy related and those related to the coastal zone risk. Increases in insurance are being seen across the country. You can't simply compare your bill from last year to this year," Mr. Schwab said, speculating that the fire safety rate drop probably tacked on anywhere from three per cent to 15 per cent to West Tisbury homeowners' bills.

"West Tisbury leaders are being very sensitive to this issue. They've listened very carefully to us and are determined to improve the situation," Mr. Schwab said.