How PPCTM Info Affects Individual Insurance Policies

ISO’s PPCTM information plays an important part in the decisions insurers make affecting the availability and price of property insurance. In fact, virtually all 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 achieve a reasonable concentration of property risks
• to review loss experience in various rating territories
• to price policies, 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. ISO doesn't know how each company incorporates PPC information into its pricing structure, so it's difficult to generalize how an improvement or deterioration in PPC will affect individual policies.

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

• PPC may affect availability and/or pricing for a variety of personal and commercial insurance coverages, including homeowners, mobilehome, 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.

For more information . . .
. . . on any topic related to the PPC program or the Fire Suppression Rating Schedule, click Talk to ISO Mitigation, or call the ISO mitigation specialists at 1-800-444-4554.