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Public Protection Classification

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Benefits for Communities

The Public Protection Classification (PPC™) program recognizes the efforts of communities to provide fire protection services for citizens and property owners. A community’s investment in fire mitigation is a proven and reliable predicator of future fire losses. Insurance companies use PPC information to help establish fair premiums for fire insurance — generally offering lower premiums in communities with better protection. By offering economic benefits for communities that invest in their firefighting services, the program provides an additional incentive for improving and maintaining public fire protection.

The program also provides help for fire departments and other public officials as they plan, budget for, and justify improvements.

The most significant benefit of the PPC program is its effect on losses. Statistical data on insurance losses bears out the relationship between excellent fire protection — as measured by the PPC program — and low fire losses. PPC helps communities prepare to fight fires effectively.

Affects on Individual Insurance Policies

ISO’s Public Protection Classification (PPC™) information plays an important part in the decisions insurers make affecting the underwriting and pricing of property insurance. In fact, most U.S. insurance companies — including the largest ones — use PPC information in one or more of the following ways:

    to identify opportunities for writing new business

    to manage the quality of community fire protection across their book of business

    to review loss experience in various rating territories

    to offer coverages and establish deductibles for individual homes and businesses

Insurance companies — not ISO — establish the premiums they charge to policyholders. The methodology a company uses to calculate premiums for property insurance may depend on the company’s fire loss experience, underwriting guidelines, and marketing strategy.

Here are some general guidelines to help you understand the benefits of improved PPC ratings for residents and businesses:

    PPC may affect the underwriting and pricing for a variety of personal and commercial insurance coverages, including homeowners, mobile home, fine arts floaters, and commercial property (including business interruption).

    Assuming all other factors are equal, the price of property insurance in a community with a good PPC is lower than in a community with a poor PPC.