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Insurance rating snafu in Hooksett causes rates to spike

HOOKSETT – The only thing more shocking than the 32 percent increase in Ed Groves' homeowner's insurance policy was his agent's explanation for it.

His agent said the Insurance Service Organization (ISO) rating for Groves' property had dropped because information needed during the ISO review was not received on time, according to Groves.

The ISO analyzes the structural fire suppression delivery system provided in a community and assigns a community a number from 1 to 10, with 1 indicating exemplary fire protection and 10 not meeting minimum criteria. Insurance companies using the service can type in an address and use the ranking for risk assessment when setting their rates.

"The higher the number, the greater the risk, and the higher the premium," Groves said.
After the most recent evaluation his property dropped from a 4 to an 8 and his premium jumped, Groves said.

Groves and others fell victim to a miscommunication that temporarily downgraded the town's ISO rating. The error could affect insurance rates for homeowners in the Central and Village water precincts whose polices came up for renewal between March 1 and Oct. 1.

"Most, if not all of their water customers went to 8B from a 4" said Town Administrator Dean Shankle.

The problem started last year when the first ISO evaluation since 1996 began. Shankle said the town and fire department submitted the required information. The water precincts are separate entities with their own elected officials, and they submitted their own information, Shankle said.

The town was informed of its lowered "public protection classification" in a Nov. 26 letter indicating that the Hooksett Village Water Precinct and the Central Hooksett Water Precinct did not meet the minimum requirements for recognition.

"It's a bit of a mystery as to what led to this change," said BJ Branch, attorney for both water precincts.

The precincts provided all the necessary information upon request and were not asked for additional information during an exchange of letters following the decreased PPC classification.
Neither precinct has had previous classification problems, Branch wrote.

After speaking with Branch, the ISO sent a letter May 30 indicating that the rating was straightened out and the town will be at 4/8B as of Oct. 1. Homes within 1,000 feet of a fire hydrant will have a 4 rating. Houses more than 1,000 feet from a hydrant will probably rate an 8B, Shankle said.

Eight B is a new designation for homes not necessarily close to water or a hydrant but located in communities found to have superior fire protection services, Shankle said.

Shankle said he sent letters to both districts suggesting that the water precincts send letters to the homeowners informing them that the new town classification will show up as of Oct. 1. He's done some research, and at least one insurance company that he's spoken to confirmed that such a letter would be sufficient to consider the rating a four, Shankle said.

Branch said homeowners should show the letters to their insurance agents now and ask for a retroactive adjustment, which could be denied.

In the meantime Groves, a Central Water Precinct customer who has lived 50 yards from a fire hydrant and about mile from the fire department for over 40 years, paid an extra $185 on his June 21 premium.

"I had to pay their inflated rate," Groves said.

The water precinct has since faxed a letter to his insurance agent, but he doesn't know if he will receive a refund. Rather than placing blame, he would like to see a town or water precinct official step up and help with the solution.

"It's been a comedy of errors here," Groves said. "But the comedy is a joke on me because I'm the guy paying the money."

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