Agenda Packets - 1984/10/22 - Laserfiche WebLink

Home Browse Search

I� level of consciousness concerning Iho nature of hoards to Ille and property which may be, or become present in the home. Evidence also indicates that homeowners who request the home safety and security analysis are not likely to habor significant hazards present in their homes: it is expected that relatively few dwellings will not be found acceptable for insurance. Fire protection agencies seem to be able to manage the increased workload of home visits and to welcome the opportunity to work more closely with homeowners in preventing fires, burglaries. and injuries. Data which support program objectives are also beginning to emerge: 1) Most homeowners are supportive of the CHIP provision for returning premium savings to the city. particularly if insurance rates are also low. A number of surveys now indicate that more than three quarters of the homeowners favor the CHIP concept, and, rill things being equal, would choose the policy which would benefit the city. 2) CHIP market penetration estimates of about 3N of eligible homes after about 4 years still appear to be reasonable, even though attractive competing products which will also benefit the city will almost certainly be offered. 3) Losses for CHIP insured occupancies are expected to be well below industry averages due to the home safety analysis and the direct self-interest relationship between rates and losses. If losses are controlled and administrative costs held to a reasonable percentage, premiums will be "saved" and will be available for the cities' savings pool. Naturally, higher or lower loss ratios proportionally influence profitability of the program. While premium savings cannot be guaranteed, and will depend on the effectiveness of the CHIP in control- ling losses, it can be seen from examining Figure 1 that savings may range from "break-even" to as much as one fifth of the premium. Cities may make their oven estimates of possible revenues based on rm average annual homeowners premium for their community, although maximum savings should not he expected immediately. Stated differently, the purpose of CHIP is to establish linkages, between a city's police and fire services and a group of insurance companies and their agents, designed to significantly reduce home fire, burglary, vandalism, and liability losses. The intended result of these linkages will be to bring the homeowner a variety of financial and insurance benefits, and provide a new source of revenue to the city. These benefits may be summarized as follows: 1) Home Safety and Security Analysis Under the auspices of the cites fire and police departments, city personnel or authorized volunteers will provide city residents, on request, wiin private in -home safety and security analyses. This prev- ention oriented review is a key factor in the success of CHIP. The more effective the home safety program is, the more benefits the program will bring in terms of insurance cost reductions and financial rewards to the city. The home visit also provides an excellent public relations vehicle for the city through the opportunity for city personnel to work on a one-on-one basis with citizens for the positive purpose of improving the safety and security of the home environment. The home visit program is developed and operated by the city, to city standards, independent of insurance company interest in the results of the analy- sis, although the analysis report must meet insurance carrier underwriting standards. 2) Homeowner Insurance at Competitive Rates If the homeowner will realease, or authorize file city to release the home safety and security he city, and if the report does not indicate any analysis report to the CHIP insurance agent in t t significant life of Property hazards the home will be recognized as a good risk and therefor eligible