When a property insurer measures the level of fire protection for an address, the simple answer may not be the best. Plotting the distance to the nearest fire station seems like the obvious path to the right answer, but a very different reality is detailed in a new Verisk white paper, The Distance Fallacy in Fire Protection.
PPC: Nine times more predictive
Verisk’s analysis shows that ISO’s Public Protection Classification (PPC®) is nine times more predictive of fire loss experience than simply using distance to the nearest fire station to assess the strength of fire protection for a specific address. The potential reasons are many.
For example, an address may be just a few miles from a fully staffed, professional fire department. But if that firehouse is in another town, the actual responding station may be a volunteer department that’s farther away and needs significantly more time to reach the address. In the event of a fire, the resulting claim could reflect a blaze that burned unchecked for much longer than the distance-based metric would suggest.
Unlike simple distance measures, PPC captures an array of details that differentiate fire stations and the level of protection they provide. These include:
- fire department improvements and deteriorations
- new communities
- new construction of large buildings
- community budget fluctuations
- water supplies
- automatic-aid agreements