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3 years ago · by · 0 comments

Rural Metro Insurance Issues

Rural Metro is the contracted emergency response service in a significant number of metropolitan and suburban areas across the US.  In many of these areas, a Rural Metro subscription is required to avoid being billed after the fact for emergency response ‘services’.

Evaluating the cost over value basis for purchasing a Rural Metro subscription can be difficult when you can’t get definitive answers. We’ve created a simple infographic to address the most common questions related to Rural Metro service.

A Rural Metro subscription is not required for most homeowners and health insurance carriers to provide coverage.  Why?  Because Rural Metro must respond to ALL emergencies regardless of the subscription status of the property owner.

Consider the following:

1) Despite what Rural Metro personnel typically tell residents, a subscription (in most cases) will not lower your homeowners insurance premium. There is a separate organization (ISO) that provides Public Protection Classification (PPC) ratings. These ratings are used by insurance carriers to calculate premium ratings.

2) It is illegal for an agent, producer or carrier to use a PPC rating other than the one provided by ISO when determining your premium calculation.  

3) Carriers and agents caught using PPC ratings other than those provided by ISO were put on notice in with AZ Dept of Insurance Regulatory Bulletin 2014-07, “The Department will, through its market conduct and rate examinations, as well as investigations, review whether a fire protection service credit has been allowed when the policyholder does not have a fire protection service contract, will not consider such credits as merely “inadvertent errors,” and will take disciplinary action as appropriate against any producer and/or insurer found to be in violation of Arizona laws. (ARS 20-443, ARS 20-451, ARS 20-385).”  Failure to correctly rate your property puts you, your agent and the carrier at risk of disciplinary action in Arizona and introduces the possibility of a claim being denied. If you’d like a copy of the above reference Regulatory Bulletin, let us know, it’s not confidential info.

4) As an example, current Rio Verde Foothills (located in Maricopa County, Arizona) ISO PPC ratings are 8W with a subscription and 10 without – if your property is within 5 miles of the Rural Metro station on Rio Verde Drive (Station #826). If you are further north on 136th Street or one of the other nearby streets, your distance may be as much as 8-9 miles from the responding station and this means your ISO PPC rating regardless of subscription will be a 10. If this is not the rating your agent/ producer has used for your current homeowners policy your policy is in direct violation of the Regulatory Bulletin cited above. (We have seen several of the captive carriers agents using PPC ratings of 3 and 4, which are City of Scottsdale and Rio Verde/ Tonto Verde community ratings instead of those identified above.)

5) The only true cost savings afforded by a Rural Metro subscription are with regard to the fee(s) charged for their response. These fees can be confirmed by contacting Rural Metro directly.

Rural Metro subscription fees when compared to property taxes are not unreasonable.  However, the cost over value scenario requires evaluating the fee paid for first responders and/or fire trucks versus the cost of annual subscriptions over a specific time frame.  It also requires understanding how your homeowners and health insurance policies will be triggered and what they cover in the event that emergency response must be summoned.  Some policies will pay the entire fee, some will pay only $500-$1,000, and some will pay nothing at all – the contract is silent with regard to response fees.

Avoiding gaps in coverage begins with an audit conducted by a geographically competent insurance broker.  Feel free to give us a call today!

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