ESCANABA TOWNSHIP - The decision to locate a new Escanaba Township fire hall in the northeast corner of Fernwood Cemetery was partially made to reduce the insurance rates for homeowners in the township and parts of Gladstone. It may be difficult, though, to predict just how much rates will change.
Insurance rates are influenced by ISO ratings. These ratings, from Insurance Services Office, Inc., assign a numerical value to properties based on factors such as distance from a fire hydrant or the type of fire department responsible for that coverage area.
"On your insurance you're rated 1-10, 10 being unprotected," said Kenny Burnette, Escanaba Township fire chief, adding that most Escanaba Township residents close to the existing fire hall are rated at Protection Class 9.
In an effort to increase protection and lower ISO ratings for both Escanaba Township and Gladstone residents who live on the bluff, the
township recently entered into an agreement with the city of Gladstone to build a second fire hall in the northeast corner of Fernwood Cemetery. The cemetery resides within the borders of the township, however in 1916 the city was deeded the property. The city moved to deed two acres of the property back to the township at its Oct. 22 meeting.
"The city has given us 18 months to get a building there, so, we're working pretty quick here," said Burnette.
Once the fire hall is constructed, the township will need to work with ISO to reduce the rate.
"We're in the process of challenging it to get it down to a 7 or an 8, which will reduce their insurance rates by about 180 bucks a year," said Burnette.
While a rate reduction is likely, it may be difficult to pinpoint the exact savings for homeowners prior to the ISO rating change.
"On an annual basis, there's a potential for insurers to save money, but how much money depends on each individual policy," said Matt Heath, licensed commercial agent for Garceau, Wenick-Kutz, Magowan Insurance Agency in Escanaba.
Homes within the city of Gladstone that are located on the bluff typically have higher insurance rates because ISO ratings on the bluff are higher - despite no real difference in distance from fire protection services.
"They're really no farther as the crow flies. What they're running into is really a difference in driving distance," said Heath.
According to Burnette, some people are taking advantage of the ISO rating system's distance factor. "Insurance agencies have basically given people a lower rate by falsifying that they are closer to a hydrant," he said.
United States Postal Service addresses are frequently used to verify addresses on insurance forms. While it may be possible that rural addresses that do not have USPS addresses could be falsified, insurance companies could avoid paying for damages if information is inaccurate at the time a claim is filed.
"An insurance agent doesn't really have the ability to subjectively change information," said Heath, adding there are "serious ramifications" for any agent who attempted to falsify information.