Insurance Rates and the Future of Fire Funding with Paul Guerrero

Unlock the secrets behind how fire department ratings influence your property insurance rates with insights from Paul Guerrero, our seasoned insurance expert with deep roots in the Austin area. Join us as Paul demystifies the crucial role of Public Protection Class (PPC) ratings, revealing how these scores directly impact your insurance premiums. Discover the financial implications of an effective fire service and the potential skyrocketing costs if your area shifts to a volunteer fire department. With insurance premiums already climbing sharply from 2020 to 2024, Paul's real-life examples highlight why understanding these dynamics could save you a fortune.

We also tackle the pressing issue of Proposition A and its threat to fire department funding in Pflugerville. This proposition could divert a significant portion of the fire department's sales tax revenue, posing a risk to local services and, by extension, insurance rates. As early voting progresses, our call to action is clear: participate and protect your community's future. We invite you to join us at Hanover's for a watch party, where community involvement turns into cause for celebration. Engage with us, whether in person or online, and let's ensure our collective voice is heard and valued.

Chapters

• 0:04 Fire Department Ratings and Insurance Impacts
• 9:46 Prop a Impact on Fire Department

Transcript

Chris Wolff: 0:04

Box alarm in ESD 2 box.

Paul Guerrero: 0:07

You would see upwards of either double or triple your current insurance. I currently, where I live, I pay $13,000 a year for insurance because of where I live at, with the PPC 10 and the dwelling route to rebuild my house In 2020, the average premium was upwards of $800 a year in 2020 for home insurance. In the course of four years, it's 100% increase. So the average premium went from $800 in 2020 to $1,600 in 2024. Now take that PPC-9 and go to PPC-10 or ISO-9, iso-10, and you're talking about $2,400 or $3,600 a year for insurance.

Chris Wolff: 0:47

Welcome to a special edition of Pflugerville on Fire. We went out, we got a special episode for you all today. We've been talking a lot about insurance and how those insurance rates for your property are going to be affected by the upcoming Proposition A vote. And we went out and we found a heavy hitter in the Austin insurance business, mr Paul Guerrero. He's been doing insurance property insurance for 20 years and, fun fact, paul is actually a third-generation insurance man, following his father and his grandfather. Paul gives us a realistic forecast of what citizens can expect insurance premiums to be with a fire department that has a reduced rating Of note. I put Paul on the spot. I asked him what PPC stands for. It's Public Protection Class and very interesting, that's put out by the Insurance Service Office. So in the fire biz we say ISO rating, in the insurance business they say PPC rating. So that's what we're talking about there. This is a short episode, just 10 minutes. I hope you enjoy the show, paul Guerrero welcome to the podcast.

Paul Guerrero: 1:53

Thank you so much, I appreciate it.

Chris Wolff: 1:55

Oh man, you're a busy guy. We're going to keep this as short as we can, so tell us a little bit, Paul, how long you've been doing the insurance deal for and what's your expertise and background?

Paul Guerrero: 2:05

Sure. So, yeah, I've been in the insurance business now for 20 years. Graduated from Texas Tech University, came straight to Austin. I duplicated my dad's business model, which was a focus on real estate. So I duplicated his model, just made it a little bit better. And my niche is real estate. We're really good at people buying houses, people refinancing, people switching their home insurance over to us stuff like that. So that's our niche. We lead with home insurance and then we take care of the cars, the condos, investment property, stuff like that. So real estate is what I love to do. So I work with a lot of realtors here in town, a lot of lenders here in town as their preferred referral source.

Chris Wolff: 2:42

A lot of people would be surprised to know that your fire department actually factors into your property insurance. Is that?

Paul Guerrero: 2:48

something you guys deal with a lot.

Paul Guerrero: 2:51

Yeah, next to credit. A lot of people don't realize that credit is the number one factor when it comes to your home insurance rates. And then the fire class is just as important to that as how quickly can the fire station respond back to an emergency? Can they put that fire out? And as a firefighter, you probably know the biggest concern is really the house that's on fire. It's the houses next door, to make sure they don't catch on fire. So, been in this business for a long time, my best friend's house caught on fire in February of last year. We had snowmageddon or icemageddon, whichever one. It was Lost his entire house, total loss.

Chris Wolff: 3:25

And so we learned a lot in that situation.

Paul Guerrero: 3:26

So yeah, I mean the, the fire class and how fast they can respond is a really big deal. I know that because I live in driftwood. Um, I live in a ppc 10 and my insurance rates are ridiculous because of where I live. And you know, last year we had those droughts. My house was within one mile of those fires, coming from the San Marcos area Wow.

Chris Wolff: 3:47

Yeah, it's just so devastating when people have a fire in their home. And yeah, the quicker the firefighters can get there, the more property can be saved. So a hundred percent. Man that's great. So tell us about. You know, here in Pflugerville everybody all the listeners know we're an ISO class one. Have you had an opportunity to run any numbers on what it would look like if our class changed?

Paul Guerrero: 4:09

Yes, so you would go to a more of a volunteer fire department which is a town class nine and a town class 10, depending how close you are to a fire hydrant. So y'all would be a town class nine. You would see upwards of either double or triple your current insurance. Currently, where I live, I pay $13,000 a year for insurance because of where I live at with the PPC 10, and the dwelling around to rebuild my house is expensive, and so you would see a double to triple your current rates. If y'all were to go to a volunteer fire station and go from a one which is the best class, your closer fire station, your response time to a fire station is super fast and so your rates reflect that risk. If you don't have that and you have to call a volunteer fire department and then they got to get there and then they got pack up and then they got to head your place. The fire is already out of control at that point and so it's a total loss.

Chris Wolff: 5:03

Right, yeah, that is rough. So, man, that is crazy. Almost a doubling of people's property insurance. That's crazy.

Paul Guerrero: 5:13

You take that and in 2020, the average premium was, you know, upwards of 800 bucks a year in 2020 for home insurance. In the course of one course of four years, it's 100% increase. So the average premium went from 800 bucks in 2020 to $1,600 in 2024. Now take that PPC nine and go to a PPC 10 or ISO nine, ISO 10. And you're talking about, you know, $2,400 or $3,600 a year for insurance. You do not want that Right.

Chris Wolff: 5:40

Yeah, if you're sitting there thinking this, that could never happen. It has happened just in the last four years. So so, paul, what's a PPC? I'm not, cause I'm a fire, I'm the fire side.

Paul Guerrero: 5:51

Yeah, a fire protection code, something protection code, something like that, same thing as ISO, it's just different different, different um letters, but essentially how far it is to a fire station, how close you are to a fire station and how close you are to a fire hydrant is what those codes mean.

Chris Wolff: 6:09

Yeah, yeah, and I'm not sure if you would know, but I bet the amount of gallons per minute that that hydrant can produce must factor in there somehow as well lot of times we deal with the opposite.

Paul Guerrero: 6:27

So you built in Round Rock in 2020 or 2018. Now Round Rock has expanded and now they've put new fire stations, and so we actually typically send in a document from the fire station and said, hey, you've got a new fire station, give us to your insurance, and the rates just plummet down because now the risk is so much better. So I've actually never gone the opposite direction. Our system wouldn't even allow me to do that, to go opposite, because it automatically pulls. But most situations I'm dealing with is, you know, a city is becoming bigger and we're getting new fire stations and we're taking it from a nine to a one or a seven to a one.

Paul Guerrero: 6:57

And so I've actually never gone the opposite direction.

Chris Wolff: 7:00

Which is a shame, because that's exactly what Pflugerville has done in the last 10 years is go. You know they invested so much time and effort to become a one. It's wild, paul. I heard you say that it would be as if going back to a volunteer department. Did you run any numbers on that?

Paul Guerrero: 7:15

Like if we yeah, yeah, it was, it was. It was double to triple the rate to go to a volunteer fire station. Yeah, it's double triple your average.

Chris Wolff: 7:23

Yeah, our chiefs had said that, depending on where you were, if you were in one of the areas that browned out of stations, you would go from an ISO 1 down to a 9 or a 10.

Paul Guerrero: 7:32

And that's what you mean. Like it's the equivalent of having a volunteer. Correct. 9 and 10 is equivalent to a volunteer fire station, it is. The response time goes from minutes to, you know, almost an hour, 45 minutes to an hour, and in the course of that fire, as you know, it's uncontrollable at that point, you know. I mean now we're worried about our neighbors, we're worried about expansion, stuff like that, and so it would be very bad for the citizens of Pflugerville if that were to happen.

Chris Wolff: 8:01

Well, paul, man, thank you so much for lending your expertise to the citizens of Pflugerville if that were to happen. Well, paul man, thank you so much for lending your expertise to the citizens of Pflugerville and listeners of the podcast. We sure appreciate you. They can. I found you easily enough on Google.

Paul Guerrero: 8:12

Yes, sir.

Chris Wolff: 8:13

Paul Guerrero man. Thank you so much.

Paul Guerrero: 8:16

Of course, let me say one more thing before I go. Okay, absolutely. We've come off of two to three years of droughts, and so we've seen a lot of fire situations and everyone thought, hey, it was a great summer. There's been a lot of rain this past summer, it's going to be good. Well, as you and I probably know, a lot of rain means a lot of growth and a lot of dead grass. That's sitting right now. So we had a lot of green during the summer times. We haven't had, and now that's been sitting and drying out. And then we're. We are more of a fire risk right now than we were in the summertime, because it grew so much trees grew, grass grew and hasn't been cut back, and so now we're in a we're in a month, month or two long drought right now.

Paul Guerrero: 8:55

I mean everything is everything is just straw waiting to catch on fire right now.

Chris Wolff: 8:59

So it's never been more important. We call that fuel in my business, paul, yeah. A hundred percent that is just sitting on a tinderbox there. Yes, sir, exactly Not the time to be reducing fire service. I can tell you that Nope, nope, it is not. Well, thank you so much for coming on the show man. I promise I'd get you in and out of here quick and you delivered. Thank you. You gave us what we needed to know and we sure appreciate you.

Paul Guerrero: 9:22

Yes, sir, good to talk to you guys and thank you so much.

Chris Wolff: 9:26

All right, so that wraps up our first ever bonus episode of the Pflugerville on Fire podcast. Big thank you to Mr Paul Guerrero. You can Google him Pretty well-known guy over here in the Austin area. And that's it y'all. We knew that Prop A you know, taking 34% of the fire department sales tax revenue was going to have a big hit on insurance rates. And there you have it. You don't have to listen to us. We got an insurance professional on letting us know. So that's it.

Chris Wolff: 9:57

We're into week two of early voting. If you're listening to us in real time, we need everyone to get out there. Proposition A is the last thing on your ballot underneath the city of Pflugerville. We need people to vote against if you don't want to defund your fire department. Hope to see everybody out and about and we'll catch you all. Interact with us on our webpage, hit us on the show notes and come on out to Hanover's. We're having a victory party. It's a watch party. I'm thinking it's going to be a victory party. We've gotten so much community support, so much community involvement. We'd love to put faces with names. Come on out and hang out with us. We'll see you there.