What is a community's classification based on?
A community's classification is based on:Administration of codes, including:
- building code edition in use
- modification of the codes
- zoning provisions to mitigate natural hazards
- training of code enforcers
- certification of code enforcers
- incentives for outside education/certification
- building officials' qualifications
- contractor/builder licensing and bonding
- public awareness programs
- participation in code development activities and the appeal process
- staffing levels
- level of detail of plan review
- performance evaluations
- review of plans for one- and two-family dwellings, multifamily dwellings, and commercial buildings
- staffing levels
- level of detail of inspections
- performance evaluations
- final inspections
- issuance of certificates of occupancy
In addition, ISO collects underwriting information, including natural hazards common to the area, number of inspection permits issued, number of inspections completed, the building department's funding mechanism and date of establishment, size of the jurisdiction and population, and fair market value of all buildings.
What is the evaluation process?
ISO distributes detailed questionnaires to building officials of all municipalities in a state. Upon completion of the questionnaire, ISO arranges for a trained field representative to meet at a mutually convenient time at the community site with each municipality's building officials. The ISO representative and building officials together review and verify the community's capabilities. The ISO representative seeks clarification and obtains supporting documentation, as necessary. The review usually takes from two to four hours. The ISO field representative may also visit construction sites with building officials. The ISO field representative then tabulates the points "scored" on the various sections of the schedule and assigns a grade from 1 (exemplary commitment to building code enforcement) to 10.
What classifications does the BCEGS program apply to a community?
ISO evaluates communities on a scale of 1 to 10, with 1 representing exemplary enforcement of a model building code or local building code demonstrating equivalency to a model building code.
Why do communities have an incentive to improve their rating?
Any community with a classification other than 1 has many incentives to improve its classification, including:
- the prospect of reduced injuries and loss of life, reduced property losses, and reduced economic and social disruption caused by catastrophes
- the prospect of lower insurance rates on buildings constructed after the community improves its classification
- pride and professionalism of the community building department to be the best it can be
- good public policy
Does a city really have incentives to raise fees or taxes to improve code enforcement — other than just so the insurance industry can cut losses?
The primary incentive for communities to commit resources to ensure proper code enforcement should be to reduce loss of life, the risk of property loss, and economic and social disruption that result from natural catastrophes. Communities with good enforcement can expect commensurate reductions in property insurance rates.
In most states, the program provides for premium credits only — not surcharges or increases. By legislative mandate, Florida requires positive and negative rating factors. Consequently, the Florida Insurance Department has approved a 1 percent surcharge for those communities not participating in the program. The surcharge applies to new construction only.
BCEGS is a useful, objective evaluation tool for assessing the resources and support available for building code enforcement relating to natural hazard mitigation. ISO developed the BCEGS program with significant input from the three model code groups and with responses to surveys sent to more than 7,500 building officials countrywide.
With BCEGS, ISO measures communities against objective standards, highlighting where resources can be applied to improve performance and a community's grade in the future.
Once ISO evaluates a community's building codes and establishes a classification, how often can the classification change?
The plan is to reevaluate each community every five years. If the community notifies ISO of a change that could affect the classification before the five-year reevaluation, ISO will reevaluate the community sooner, as ISO’s schedule permits.
Can a community get only one classification, or can different classifications apply to different types of properties?
Some municipalities, for example, don't adopt or enforce codes for buildings with two or fewer families, but do enforce codes for buildings with three or more families or for commercial occupancies. In such cases, separate classifications apply. ISO lists one- and two-family dwellings as outside the scope of this program, while all other properties receive the community's classification. The insurance manual's rules advise which classification to use for a particular risk.
What happens when ISO evaluates a community?
When ISO evaluates a community, the classification automatically applies to any building receiving a certificate of occupancy in the year the classification goes into effect or later years. Once ISO assigns a classification to a building, based on the community classification in effect at the time the building is constructed, that classification will remain with that building — even if a community is subsequently reevaluated.
What happens when ISO reevaluates a community?
The new classification will apply to buildings receiving a certificate of occupancy in the year the new classification becomes effective and later years. It is conceivable that as a building department improves over time, a community could have more than one classification. The applicable classification for any building would depend on its certificate-of-occupancy date.
To consider a specific example: What happens to buildings constructed in 1997 when a town had a classification of 5, but in 2002 the classification changes to 3?
The classification assigned to a building will be the classification in effect in the year the building receives a certificate of occupancy. The classification that applies to a building will not change as a result of a municipality's subsequent changes in code effectiveness that result in a different classification for the municipality. The new municipal classification will apply only to buildings constructed when the new municipal classification is effective.
Thus, in this example, the buildings constructed from 1997 through 2001 would receive a classification of 5, and buildings constructed in 2002 or later would receive a classification of 3.
How can a building department be best prepared for its evaluation? What resource materials should be available?
Department officials should have available documentation that supports questionnaire answers. For example, officials must provide copies of employee-code certifications, training records, the building code agency's budget, number of inspections and plan reviews performed (by type: one- and two-family dwellings, multifamily residential, and commercial and industrial structures). In addition, records on the amount of time spent on public-awareness programs will help complete the evaluation.
12. Are classifications established on the basis of codes and level of enforcement in place at the time of the survey? Or has ISO established classifications on an absolute scale, so that meeting certain criteria always results in the same classification?
The classification system looks at one year's worth of documentation and effectively takes a snapshot at a particular time. The classification considers the model code in effect at that time as well as the municipality's resources and enforcement level.
These are dynamic elements. Thus, a community classified in 1995 could possibly be evaluated against a different code from a community classified in 2005. For example, in 2005, a community that retains its 1995 code rather than adopting a more stringent code prevailing in 2005 would receive a less favorable classification.
13. Did ISO prepare the schedule specifically for very large jurisdictions, unfairly penalizing some small cities?
ISO wrote the schedule to assess the risk of property loss regardless of a jurisdiction's size. A structure does not stand any different chance of survival in a small community than in a large community when both share an equal commitment to code adoption and enforcement.
14. How does BCEGS compare with ISO’s Public Protection Classification system for classifying communities' fire-suppression capabilities?
ISO modeled BCEGS after the insurance industry's fire protection classification system, which assesses municipal fire departments and water supplies. The similarities include the classification scale of 1 to 10 and a reliance on recognized standards as reference points for the evaluation. The fire protection classification system, which began in 1916, was an insurance industry response to fire losses and has been a fundamental factor in developing insurance premiums ever since.
The main difference is that changes to a community's fire department and water supply affect the potential risk to all structures in the community, while changes to a community's building department affect the potential risk only to structures built after the change.
15. How long after grading occurs will the building department become aware of its classification?
Usually within three months.
16. How flexible is the process in recognizing effective local programs that may be unique and innovative? Is there a special provision in the schedule? Does the BCEGS program consider innovative initiatives for extra credit?
The BCEGS program is designed to be a performance-related program. That is, it represents the degree of the risk for property loss within a jurisdiction as a function of the community's commitment to building code enforcement, with a major emphasis on mitigation of natural hazard damage. Although BCEGS relies on recognized standards as the foundation for code adoption, BCEGS can recognize alternative methods of enforcing those codes. ISO recognizes alternative methods if they are effective and equivalent to industry standards.
17. Is there a cost associated with the evaluation process?
Insurers bear all of the program's costs, because insurers use BCEGS information. Municipalities and taxpayers don't incur any costs.