In the early 1900s, major U.S. cities suffered disastrous fires that destroyed billions of dollars’ worth of property. In the aftermath, insurance companies realized they needed advance information on the fire loss characteristics of individual communities.
The National Board of Fire Underwriters (NBFU) had been established in 1866 to promote fire prevention and public fire protection. After a number of conflagrations — including the great Baltimore fire of 1904, which claimed 140 acres, more than 70 blocks, and 1,526 buildings — the NBFU expanded its scope, developing the Municipal Inspection and Grading System. Under that program, engineers evaluated the fire potential of many cities. In response, those cities improved their public fire protection services.
Since 1909, the Municipal Inspection and Grading System and its successors have been an important part of the underwriting and rating process for insurers writing personal and commercial fire policies. ISO’s Public Protection Classification (PPC®) Service now gives insurers credible data to help them develop premiums that fairly reflect the risk of loss in a particular location.