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Serving Northern St. Louis County, Minnesota

Insurance rate claims inaccurate

Marshall Helmberger
Posted 8/27/20

TOWER—Recent claims in local media that residents and businesses are likely to face insurance rate increases as a result of the recent sale of the Tower Fire Department’s elevated master …

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Insurance rate claims inaccurate

Posted

TOWER—Recent claims in local media that residents and businesses are likely to face insurance rate increases as a result of the recent sale of the Tower Fire Department’s elevated master stream engine were premature, and most likely false.
The claim, by former fire chief Steve Altenburg, which appeared on the front page of the Aug. 14 Tower News, is part of a continuing pattern of attacks by Altenburg in that newspaper against the fire department, the city’s ambulance service, city officials, and others, that he appears to believe were responsible for his dismissal as fire chief and ambulance director back in March. Altenburg has since launched dozens of public records requests on the city in an effort to find grist for his attacks, which have dominated city coverage in the Tower News for months.
Altenburg recently filed for a four-year term on the city council, making Altenburg’s continued attacks on electoral opponents a clear breach of journalistic ethics.
Altenburg, in his Aug. 14 story, claimed that the sale of the city’s second fire engine “will have a negative impact on the city’s ISO rating,” which could lead to higher insurance rates for residents, business, and even the city itself. ISO stands for Insurance Services Organization, a private ratings company.
In fact, there’s little reason to believe that Altenburg’s claim is true. A department’s ISO rating is based on dozens of factors, including the quality of emergency communications, department training, record-keeping, response time, and the ability to flow a sufficient volume of water to effectively fight fire. In Tower, which is primarily served by hydrants, the capacity of the city’s water system is likely to be a bigger factor, according to Jeff Mayer, who leads the firefighter training program at Mesabi Range and Technical College in Virginia and Eveleth. Mayer is also chief of the Pike-Sandy-Britt Fire Department.
What’s more, the ISO rating is not dependent on the resources of any given department. Resources available through automatic mutual aid also count toward any ISO rating for a department. Tower has automatic mutual aid with both Breitung and Greenwood townships, both of which maintain substantial pumping capacity, located in close proximity to Tower, particularly in the case of Breitung.
“In either case, they wouldn’t automatically lower it,” said Mayer. “They would have to do an evaluation. The change probably wouldn’t lower the city’s rating much, if at all,” predicted Mayer.
The city of Tower’s ISO rating was not available as of press time. ISO does not make that information generally available to the public.
Even if the department’s rating was lowered, the impact to insurance premiums would likely be negligible or non-existent, since most insurance companies don’t even consider the rating. “It’s not cut and dried, I’ll tell you that much,” said Donna Mosher, with the Tower Soudan Agency. As an independent agent, Mosher sells products from five different insurance companies, and she said only one, Auto Owners, even considers ISO ratings when setting rates. Most insurance companies she works with use other criteria, such as distance from a fire hall, when determining premiums.
Mosher said a multitude of factors determine the rates paid by home or business owners. “Things like a good credit score can make a big difference,” she said. While premiums can vary significantly between customers, in part because of the many factors at play, Mosher said, in general, rates don’t vary much between customers in town or in the country, all things being equal. That’s despite the fact that many rural areas don’t even qualify for an ISO rating, or are rated at a nine or ten.
Tower fire officials opted to sell the second engine, a 1982 American LeFrance engine that had seen minimal usage in recent years. They received $4,200 for the vehicle as a result of competitive bidding.
According to city records, the truck’s hydraulic ladder, which is supposed to be certified annually, had last been inspected in 2014.
The sale also made room in the fire hall to store the department’s brush rig. That rig, which sees far more use than the department’s second engine, had been sitting outside, unprotected since a fire burned the department’s storage garage in 2014. The truck is now badly deteriorated, with extensive rust, hose damaged by ultra-violet light, and an inconsistent and badly-rusted external pump. The deterioration in that vehicle took place during the period that Altenburg served as chief.