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Importance of Insurance Ratings

Reference Number: MTAS-412
Reviewed Date: 10/28/2020

In the following example, if a homeowner pays $1 per year for fire insurance in a Class 10 rating, then:

  • Class 9 pays 93 cents, (a savings of 7 percent over a Class 10.)
  • Class 8 pays 72 cents, (a savings of 28 percent over a Class 10.)
  • Class 7 pays 68 cents, (a savings of 32 percent over a Class 10.)
  • Class 6 pays 65 cents, (a savings of 35 percent over a Class 10)
  • Class 5 pays 63 cents, (a savings of 37 percent over a Class 10.)
  • Class 4 pays 60 cents, (a savings of 40 percent over a Class 10.)
  • Class 3 pays 58 cents, (a savings of 42 percent over a Class 10.)
  • Class 2 pays 55 cents, (a savings of 45 percent over a Class 10.)
  • Class 1 pays 53 cents, (a savings of 47 percent over a Class 10.) [8]

This information is just a guideline, as the actual rates a property owner will pay depend upon the proprietary formula their insurance company uses for calculating property insurance premiums.

ISO Mitigation Online reports the following breakdown for Tennessee communities as of August 2020:

Grade Number of Communities
1 7
2 32
3 63
4 113
5 257
6 187
7 49
8 6
8B 12
9 117
10 15
Total 858

 


[8] www.isomitigation.com