Economy Challenges Fire Protection

Since their inception in the days of Ben Franklin, the nation’s fire departments have bravely risen to the challenge of the dangerous task of firefighting. But the current economic recession has added to existing financial strains on community resources and forced fire department leaders to make tough choices. These issues cut across all departments — volunteer, combination, and career, as well as rural, suburban and city-based.

A September 2009 survey by the National League of Cities (NLC) indicated that nearly nine in 10 city finance officers are less able to meet their fiscal needs than in 2008. The NLC notes that the weak fiscal condition of the nation’s cities will most likely extend for 18 months to several years.

The NLC study also pointed out that cities are instituting hiring freezes, laying off personnel and delaying or cancelling planned infrastructure projects to close funding shortages. The effects may well extend months and years down the road. According to the Fire Apparatus Manufacturers Association, half the 76,000 fire trucks in use across the country are at least 15 years old, yet cash-strapped municipalities can’t afford to buy new ones. This will undoubtedly surface in the form of future breakdowns and equipment reliability issues.

Some fire departments have shut down fire stations entirely; reduced firefighter on-duty strength; or instituted temporary “brown-outs” where stations are shuttered on a rolling basis.

In many cases the financial woes are tied to state deficits.The Wall Street Journal recently reported that states’ revenues are down 17 percent compared to 2008. Even federal funds for fire safety are in danger.

Fire is the leading cause of property loss in the U.S. Homeowners fires account for 58 percent of total insured fire losses, while commercial multi-peril and fire losses each account for 21 percent. According to the National Fire Protection Association, fire departments respond to fires once every 22 seconds. Every day, residential and commercial building occupants face losses of property and life.

In each of the last two years, wildfires burned seven million acres across several states — twice the average of the 1990s. Also, according to the National Crime Information Bureau, suspicious car fires spiked 20 percent in 2009 while arsonists killed 295 people and destroyed nearly $900 million in insured property in 2007.

ISO’s Rating Schedule

ISO’s Fire Suppression Rating Schedule (FSRS) is a methodology used in reviewing a community’s structural fire-suppression capabilities. The country-wide schedule helps insurance companies evaluate a community’s fire-suppression system. Using Public Protection Classifications (PPCs), ISO measures the relative differences in levels of structural fire protection in more than 46,000 communities. Insurers use the results in marketing, underwriting and pricing homeowners and commercial property insurance.

A recent Fireman’s Fund Insurance Co. survey of fire service leaders indicated that the three top concerns of fire departments are: lack of budget; outdated equipment; and staffing, recruiting, and retaining members. More than 55 percent said that if economic issues continue for another 12 months, their ability to serve their communities will be negatively affected. Also, 57 percent of volunteer departments said they are losing members to departments with paid positions —compounding an existing crunch for personnel.

An ISO survey indicated that 93 percent of volunteer and combination volunteer/career departments are having difficulty finding a sufficient number of responders due to the time commitment for volunteers, a small volunteer pool and the education and training requirements. Among chiefs who call on neighboring departments for help on the first alarm, 74 percent said a very significant reason for doing so is the need for more responders.

The exterior of a fire station is no indication of its response capability; what matters is what is inside. The ISO evaluation identifies departments that lack adequate personnel, apparatus, equipment or training. These departments are classified a “10” — no insurance recognition. Currently, more than 800 such stations exist across the country.

Without changes in recruiting and retention policies, communities can fall below even minimum standards governing the number of trained firefighters required to mount an effective first response to a building fire.

During 2009, the number of PPC retrogression cases in progress rose by more than 20 percent compared with previous years, generally due a reduction in personnel, a reduction in the number and type of apparatus, gaps in optimal deployment of apparatus, or deficiencies in training. Where the number of available fire responders drops below national standards, ISO must withdraw protection credit entirely. ISO offers those communities up to six months to implement the staffing improvements required to regain protection credit.

Many communities have resolved personnel and equipment issues and even enhanced response coverage with little financial outlay. Some communities have instituted resource-sharing programs that include utilization of full-time automatic mutual aid response, enhanced water hydrant and apparatus testing programs, and sharing of training.

Many communities of varying size are grappling with significant economic issues that can affect the quality of fire protection. The situation demands that officials be innovative to stretch limited resources. It is important for insurers to keep up with the changes in communities’ structural fire-suppression capabilities to more accurately price and underwrite policies commensurate with the potential risk.