Effect on Insurance

If a fire district improves its PPC, homeowners and businesses in the community often save money on their insurance premiums. If property owners spend their savings in the community, the extra cash can help improve the local economy. And a community with improved fire protection may find it easier to attract new business, increasing jobs and boosting the economy even more.

In 2000, the Rural Fire Protection Work Group, a committee appointed by Arkansas Governor Mike Huckabee, quantified the economic benefits of improved fire protection for that state. The work group considered a series of measures designed to improve the Public Protection Classifications of rural Arkansas communities. In its final report, submitted to Governor Huckabee in August 2000, the work group estimated the statewide cost of those projects at about $150 million — or $15 million a year for 10 years.

Next, the work group projected the reduction in property insurance premiums when each of 839 rural fire departments has improved its PPC to Class 7. According to that analysis, the statewide savings would total more than $100 million per year. More than 425,000 homeowners would share the benefits, with an average annual savings of $235 per household. The Arkansas work group projected increased economic activity at more than $2 billion over a period of 13 years. According to the work group's analysis, that economic activity would generate additional state and local sales-tax revenue more than offsetting the cost of the improvements.