So, now you just sit right back and wait for the insurance savings to roll in, right? Not so fast. You need to take a few more steps to make sure that the insurance industry will give you full credit for your investment.
Fire insurance rates are determined by a company called the Insurance Services Office (ISO). Once built, an ISO representative will visit a building to inspect its type of construction, occupancy, loss protection and community features. ISO will recommend that the building be assigned a specific fire rate, which is used by your insurance company to develop your final insurance premium.
Like Haley's comet, ISO inspectors visit very infrequently. Therefore, the fire rate for your office building may be based on an open-flame table side cooking restaurant from the 1980s. They make their rounds, but there are a LOT of buildings out there. Insurance companies can request updated inspections as well.
Proper sprinkler credits can discount a Property premium by 40%. The challenge lies in getting the credit. If ISO is not satisfied with your sprinkler system, then they may not approve a credit at all. Let's review their requirements to make sure we get it right.
Their sprinkler system evaluation consists of a review of these areas:
- System Design based on the requirements of the occupancy
- Available water supply
- System installation & components
- System testing
- Areas of the building without sprinklers
- Building conditions that effect the operation of the sprinklers
An ISO inspector will want to review these items during the building inspection:
- Main Drain Test results (all systems)
- A copy of the Underground and Overhead Piping Hydrostatic test Certificate (all systems)
- Dry Pipe Trip Test (systems with Dry Pipe Valves)
- Fire Pump Performance Test (systems equipped with a fire pump)
- System Design Criteria in the form of either sprinkler plans, hydraulic calculations, or hydraulic data plaque information.
I will expand on these reports & criteria in future posts, but this is the laundry list. If any of these items is missing when the ISO inspector knocks on your door, then you won't get your sprinkler credit.
This information is drawn from ISO's Property Resources Online:
Feel free to contact me with comments or questions.