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UNDERSTANDING THE BASICS OF PROPERTY PROTECTION IN COPE UNDERWRITING For almost 400 years commercial property underwriters have used the same general information when evaluating a property risk: • Construction; • Occupancy; • Protection; and • Exposures. Collectively, these are known as the “COPE” data. Although the VU has written and taught sessions on all four parts of COPE, this article provides a general overview if just one part – Protection. Local fire departments, sprinkler systems, fire extinguishers, alarm systems, and fire doors/fire walls are the five main property protection features potentially available to property owners. Each of the five features is classified as either: • Public or private; and • Active or passive. Public Protection Fire departments are the only protection feature considered as “public” protection. Fire departments are funded by local governments and protect somewhat large areas, responding to fires and other public emergencies. Each fire department is inspected and assigned a grade – its public protection class (PPC). Most fire departments are inspected and graded by Insurance Services Office (ISO), but some are inspected and graded by the state Departments of Insurance. Upon inspection, each department is assigned a number grade ranging between 1 and 10. The lower the number, the more effective ISO (or other jurisdictional authority) considers the department.
Public protection grades are based on factors such as fire department response times, water supply, personnel training, available equipment, communications, and mix of paid versus volunteer personnel. Countrywide, the most common PPC grade is 5. Not surprisingly, the least common, and most coveted, class is 1. (Note: Public Protection Class 10 is assigned to locations more than five miles from the closest responding fire department.) Occasionally fire departments are assigned two PPCs. These are referred to as split classification departments. The ultimately assigned classification is a function of the closest fire hydrant or other creditable water supply. If the closest hydrant or other creditable water source is within 1,000 feet, the lower (better) PPC is used; if over 1,000 feet, the higher class is applied. Historically, split classes were listed as 6/9 or 5/9 (examples only). However, in 2013, ISO changed how split classes are assigned. Now an “X” or “Y” replaces the historical “9” or “8B” assignments. For example, an historical 6/9 split classification is now shown as 6/6X; an historical 5/8B is now a 5/5Y. Beyond these split class changes, ISO also created a new PPC 10 option – 10W. A “10W” is assigned to properties located more than five miles but less than seven miles from the closest responding fire department AND less than 1,000 feet from a creditable water source. According to ISO, properties meeting these parameters are a lower fire risk than is indicated by the traditional PPC 10. If these conditions aren’t met, the property is assigned the traditional 10. North Carolina is the only state that has not adopted either classification change. wisconsin INDEPENDENT AGENT|
NOVEMBER 2021 | 21
