This saves homeowners between 4 percent and 5 percent on their insurance rates. Key rating, by contrast, used five broad brackets. Unless a city's key rate already was at the low end of a bracket, the town could cut homeowners rates only with very substantial improvements in fire protection. Fringe rating also was based on the assumption that larger cities would automatically provide fire services outside their boundaries. This assumption, however, no longer is valid.
Many cities confine fire services to within their own city limits.
Fire Protection Incentives . Fringing, in effect, lowered rates in areas with poor or non-existent fire protection at the expense of communities whose taxpayers were paying for good fire protection. By eliminating this subsidy, the PPC system offers a strong financial incentive to improve fire protection. A The change, by design, is revenue neutral and should not make extra money for the insurance companies. Rate increases attributable to the change in some areas are offset by decreases in others.