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Municipal Technical Advisory Service (MTAS)

ISO Rating Effect on Economic Development

Reference Number: MTAS-414
Reviewed Date: 08/25/2023

Fire Service Rating Effect on Commercial and Economic Development
Every small town and rural community in Tennessee is interested in promoting growth and commercial and economic development. They budget for economic development, participate in area development efforts, become Three-Star certified, subsidize new development, and support it in other ways. They want business and industry to locate in there for jobs and economic opportunities. A community that does not have adequate water for fire service is at a tremendous disadvantage over a community that does. The difference in commercial fire insurance premiums between a community with adequate water for fire service and a community that does not have adequate water is significant, and in many instances may prevent industry from locating in the community. If two or more communities are competing to attract a business, a community with a better ISO rating will have an advantage, as the business will pay lower annual property insurance premiums, which lowers the business's overhead costs.