In issuing its report card on Laguna Beach, the Insurance Services Office Inc. lowered the town’s classification to 2 from 4, with 10 counted as the highest risk area, City Manager John Pietig announced last week.
While the classification change reflects an improvement in reducing potential fire danger, property owners are not likely to see a downward shift in premiums for property insurance, insurance broker John Campbell said. “It should signal to the insurance industry that Laguna is a better protected community because of the revised rating.”
But rather rate cuts, Campbell predicts the revision more likely will loosen insurers’ underwriting inhibitions, drawing more insurers into the market.
ISO evaluates jurisdictions every five years. Municipalities with well-enforced, up-to-date codes should demonstrate better loss experience, and insurance rates can reflect that, said ISO’s Joseph Masington. The prospect of lessening catastrophe-related damage and ultimately lowering insurance costs provides an incentive for communities to enforce their building codes rigorously, especially as they relate to windstorm and earthquake damage, he said.
“ISO is only interested in safety,” explained Carl Hefner, the city’s building official. “They analyze aspects of building code enforcement and determine what level of compliance we are enforcing in property loss-prevention.” In the year ended June 30, the department made 5,660 inspections, down from 5,453 the year before and 7,122 in the year ended June 30, 2009, he said. The lower figures reflect a decline in building activity.
Since the previous ISO evaluation, the entire city, instead of just particular neighborhoods, are now subject to fire zone building requirements, mandating installation of fire sprinklers and heat-rejecting tempered glass, as examples, Hefner said. New fire-zone rules went into affect in 2007, he said. “We were close to getting a 1,” Hefner said of ISO grading.
Even so, Hefner, who has been on the job since last December, says sometimes Laguna’s building rules work at cross-purposes. He cited $180,000 in flood-ruined hardwood floors at a newly built Oak Street home. View-preserving height limits required a foundation four-foot below grade. “There wasn’t flooding in the old house,” Hefner said, and the code only required a sump pump to meet average rainfall. “But it floods here every 10 years,” Hefner pointed out.