Lack of transparency in property protection classifications from a state rating bureau is one of the biggest concerns from people involved with fighting fires in
Washington, a new report from the Washington state Office of the Insurance Commissioner shows.
The OIC’s report on pr
operty protection classification standards recommends performance-based modernization an
d transparency for the Washington Survey & Rating Bureau, among other changes to the state’s independent fire protection rating bureau.
The Legislature requested a report on the WSRB’s rating methodologies and the potential for modernizing them. The OIC delivered the report to the Legislature on May 28.
The WSRB collects data about fire departments, municipal water supplies and emergency communications in Washington to generate protection class ratings
. The bureau assigns ratings from 1 to 10. Insurance companies buy rating scores to determine if they will cover individual properties and use the scores for setting premiums.
Report consultants surveyed fire service professionals across the state and found that the lack of transparency was the most pressing concern. One problem men
tioned was the difficulty in understanding how classifications are calculated and how investments of public funds could change rating scores.
The report’s findings include:
WSRB’s methodology doesn’t reflect how fire departments perform during actual fire responses.
Its fixed distance thresholds create “cliff” effects where minor geographic variations produce major classification swings.
Rural and volunteer d
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epartments are evaluated based on standards created for urban departments staffed full-time by career firefighters.
The report proposes a structur
ed pilot framework for fire protection capability ratings focusing on performance-based metrics.
What began as a lawsuit filed against Church Mutual Insurance Company on a $1 million-plus claim dispute turned into a potential $2 million award against a co
ntractor after a jury found it intentionally interfered with the insurance contract and caused the litigation.
The case, The Calvary Baptist Church of Denver and Church Mutual Insurance Company V. Skyyguard Corp., came about after it was discovered a contractor orc
hestrated an inflated appraisal process. That prompted the church to settle with Church Mutual for $50,000 and side with the carrier.
In a counterclaim that played out in the U.S. District Court for the District of Colorado, the church sued the contractor for breach of contract and negligent mis
representation, and the insurer sued for fraud and intentional interference of the insurance contract causing a breach of the misrepresentation clause and punitive damages.
“I think this is the first time, certainly in Colorado, that I’ve seen a claim be brought for intentional interference with the insurance contract for breach of the misrepresenta
tion clause and we were very intentional in how we brought that claim,” said Jeremy Moseley with Spencer Fane, who represented Church Mutual along with attorney Will Brophy.
