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Some Union Parish Residents to See Drop in Fire Insurance Rates

Commissioner of Insurance Jim Donelon says Union Parish homeowners in Spencer West Sterlington Fire District (Spencer West Sterlington area) can expect significant rate reductions in their fire insurance premiums, effective March 11, 2013.

UNION PARISH -- Commissioner of Insurance Jim Donelon says Union Parish homeowners in Spencer West Sterlington Fire District (Spencer West Sterlington area) can expect significant rate reductions in their fire insurance premiums, effective March 11, 2013.

Donelon recognized firefighters and local officials in Spencer West Sterlington Fire District for the improvement of their fire protection grading from Class 5 to Class 4.

"The improved fire protection grading will bring about insurance rate reductions for many policyholders - but perhaps more importantly, the new grading means that the protection of residents has been significantly enhanced," Donelon said. "I commend the community for their successful efforts to improve safety."

Fire insurance for a home valued at $150,000 was costing residents in Spencer West Sterlington Fire District about $1,019 a year. That cost is likely to about now drop to about $949 under the new grading, saving homeowners about $71 in annual premiums. 

The amount of the premium rate reduction will vary, depending on the value of the property, the fire district where the property is located and the rate schedule of the company insuring the property.

Fire protection grading is promulgated by the Property Insurance Association of Louisiana (PIAL) and approved by the Louisiana Insurance Commissioner. All fire districts are graded on a scale of 1 to 10 by PIAL, with 10 representing no fire protection and 1 being the best.

"A variety of factors are considered in determining a district's grading. Everything from the number of dispatchers on duty to the number of firefighters and fire trucks, to the availability of water affect a district's grading," Donelon added.

Rankings may change any time PIAL resurveys a district, or they may remain the same. An upgrade (such as Class 6 to Class 4) will probably mean a drop in property insurance rates.  PIAL conducts surveys of fire district's fire protection services before issuing a grading.

If PIAL surveys a fire district and finds it is offering fewer services than before, they may "retrograde" the class, from a 4 to a 6, for example. When this happens, property insurance rates will probably go up.  Policyholders in the affected area should contact their insurance producer if the expected reduction in fire insurance premiums is not reflected in their next renewal notice.

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