Monroe, La., Keeps Top Fire Insurance Rating

November 8, 2006

The city of Monroe, La., has maintained its coveted Class 1 fire insurance rating by the slimmest of margins.

Officials announced the department had received notification from the Property Insurance Association of Louisiana that the city had retained its Class 1 fire rating by less than two-tenths of a point.

The Class 1 rating is the highest rating a fire department can receive from the Property Insurance Association of Louisiana. Such ratings lower property insurance rates for businesses and homeowners.

To achieve and maintain a Class 1 rating, the fire department must score at least 90 points on its review.

Fire Chief Jimmie Bryant said the fire department scored 90.13. The city originally received its Class 1 fire rating in April 2002 with a total score of 91.30.

The score determines which of 10 classes a department falls. The higher the score, the lower and better the classification.

“A tenth of a point is major in this rating,” Bryant said. “The cuts that have been made in the last three to four years have made some things extremely difficult.”

A major concern between the last rating and the current one was the amount of department budget cuts because of the city’s financial problems.

In 2003, Mayor Jamie Mayo froze $300,000 in capital spending for the fire department that had historically been used to pay for station renovations, computer system upgrades, radios, water hoses and breathing equipment for firefighters.

In 2004, fire department expense spending was cut by $235,000. During the next two fiscal years, Bryant was forced to cut another $2 million from his operating budget.

“There were reductions we had to make that were very difficult,” Mayo said. “After those cuts, we looked at the numbers and knew this rating would be very close either way. We were hopeful it would be on the plus side.”

Bryant said despite the budget cuts, nearly $7 million in funding through the city’s capital infrastructure program helped improve the city’s rating in the area of equipment and firefighting abilities.

The funding was used to purchase new fire trucks and to build a public safety center that houses a relocated fire station.

In addition to the safety aspects, the city uses its Class 1 fire insurance rating as a marketing tool to attract and keep business in Monroe because of the savings in insurance premiums, Mayo said.

If the city had dropped to a Class 2 fire insurance rating, residential and commercial insurance customers would likely have seen a 2 percent increase in premiums, said Harvey Hales, a longtime agent for Shelter Insurance.

“Depending on whether you’re insuring a building for $200,000 or $2 million, it becomes more and more significant,” Hales said. “It may not be a make or break cost for any one year, but over a period of time the amount of money could be significant. The savings with a Class 1 rating could be phenomenal compared to a Class 2 rating over a period of years.”

Information from: The News-Star,

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