By Jason A. Smith
Gerald Bobo, a retired insurance agent, is upset. He is irked about something he says is taking place in his former line of work, and he is on a mission to alert the public about it, especially long-time homeowners.
Bobo contends that homeowners in Henry, Clayton, and others statewide, may be paying more than they should in insurance premiums because they, like him, have been paying for policies based on incorrect Insurance Services Office (ISO) fire ratings.
"I know people are going to call me a whistleblower, and a lot of people are going to be mad at me, but a lot of people are going to be happy as hell," Bobo said in an exclusive interview with the Henry Daily Herald.
He said he discovered discrepancies in his homeowner's insurance premium in September of 2009, when he probated his wife's will, after her death. One of them, he said, centered on the fire-protection class for his home. Fire ratings -- measured on a scale of 1-10, with 1 being the best, and 10 being the worst for fire protection -- are used by insurance companies to set premiums.
"Homeowner insurance is based on a lot of things -- the type of house, where it's located, the amount of insurance, and the type of construction," Bobo explained.
"I came to Clayton County 30 years ago. A lot of it was a Class 10 -- no fire protection. The rates were very high. Over the years, the fire-protection class has gotten better. Some agents and companies keep track of it and get it right, and some don't," the retired agent said.
Bobo began serving in the U.S. Navy in January of 1942, and qualified to work on submarines after completing boot camp. He later joined the Air Force, as a radar man, prior to his involvement in the insurance industry. Bobo now wants to shine the spotlight on what he claims are raw deals in his old profession.
The 86-year-old former agent complained about his insurance premium last year, and received a check for almost $300, because mistakes were made by the Georgia Farm Bureau Mutual Insurance Company, which sold him his policy, and by the Henry County Tax Assessor's office, and by those responsible for inspecting his home for the policy, he said.
Bobo produced records showing that the size of his home in Clearwater Pointe subdivison was different from the size for which it was rated by his McDonough insurance company.
"He is in the city, and it was written up as a county policy," said Daniel M. Lunsford, Bobo's insurance agent. "I found it out, and got it changed. I was able to get it brought back. Most of the time, that does not happen. Now, we've got a computer, and it shows whether the protection class [is] 5, 6, or 10."
Most insurance companies now use a Property Protection Class program that shows the ISO for most of the homes in the state.
Laurence Street, chief appraiser for Henry County, disputed the claim by Bobo that homes in Henry are not inspected as they should be. Street acknowledged, however, that mistakes are sometimes made in the appraisal process.
"We do inspect homes," Street said. "We don't inspect everyone, every year, but they are inspected. The [Georgia] Department of Revenue recommends that each home gets visited once every three years, at least.
"We have 85,000 properties to appraise each year, so I can't guarantee that they're 100 percent correct," Street continued. "But that's one of the reasons for the appeal process. We don't pretend that we're perfect."
The appraiser added that his staff conducts mass appraisals, for multiple homes in a given area. "The reason we do that is, we have to be uniform in application of our values and procedures, and methods of evaluation," Street said. "We get information, also, from building permits and things of that nature. Sometimes, that lets us know that something is going on at the property that may affect value. Each year, we look at all the transactions that occur in the county. We physically do the neighborhood in general, also."
Street was quick to point out that the insurance value of a home is not related to its assessed value. "There are different reasons for evaluation," he said. "Insurance is one reason, and tax purposes is another. We have different rules that guide us, than what an insurance company has."
Henry County Fire Capt. Sabrina Puckett said most of the county qualifies for a Class 5 fire protection rating. "Parts are a 9, and parts are a 10," she said. "[It] depends on the distance of the residence from a hydrant, and the distance of the residence from a fire station."
Unincorporated Clayton County carries a Class 3 fire rating, said the county's Fire and Emergency Services Assistant Chief, Landry Merkison. "That covers the City of Jonesboro and the City of Lovejoy," Merkison said. "We have an intergovernmental agreement with those two municipalities, to provide fire services for their citizens."
Merkison added that the cities of Morrow, Riverdale and Forest Park have their own fire departments, and ratings in those areas are calculated individually, and separate from the county itself.
Bobo said his desire to be fair to clients often resulted in his business not being as profitable as some of his more unscrupulous counterparts. "I have gone to closings myself, where I bring my policy and had talked to my client, and there was another policy waiting for them on the same house, to close it from a real-estate broker," said Bobo. "It's not right."
"The average retirement pay [for agents] is over $100,000," he continued. "My retirement pay is $18,000. I could have worked harder, but I have gone to real-estate agents .. who get money illegally. Agents get in business illegally. There's no playing field. The fire-protection class changes, and they don't pay enough attention to it to get [a policy] changed properly."
Discounting the possibility for human errors, and local board of assessors, Bobo alleges that agents in the insurance industry are not doing their jobs in making sure they have the correct ISOs, which allows them to collect more money on homeowner insurance premiums.
"The whole state is like this," said Bobo, who worked as an agent in Riverdale before retiring in 1984. "I know Clayton and Henry are. I was in Riverdale for 26 years, and 10 in Henry. I know."
A check with insurance agents in Clayton and Henry provided no supporting comments for Bobo. Those who are actually writing policies, say Bobo may be somewhat off base because there is little they have to do with ISOs.
Michael Joiner is an insurance agent with the Starr Insurance Agency in Forest Park. He said agents, on the whole, do not have the ability to alter a fire-protection class, once it has been set.
"With the technology today, it is very difficult for an agent to input a fire-protection class, other than the correct one," Joiner said. "In most cases, the insurance company rating system that we use, automatically inputs the fire-protection class for us.
"The only unethical thing I see some agents doing is, they under-insure the house," Joiner continued. "They're insuring for market value, versus the replacement value. That's going to cause an issue, in the event of a claim."
Bobo disagreed: "As an agent with State Farm, if I submitted a change to the company, they would automatically make the change to the fire-protection class."
Chris Ragan, an agent at Strawn & Co., Insurance in McDonough, said fire ratings in Henry are "cut and dry."
"If you're within 1,000 feet of a fire hydrant, and within five miles of a fire station, it's a 5," said Ragan. "In the city limits of McDonough, it's a class 4."
Ragan added that in rural areas, "more questions need to be asked," in order to obtain accurate fire-rating information.
Bobo said he is "fed up" with authorities at the state level, who, he says, are not doing their jobs correctly. As a result, he claims, homeowners are losing money.
"I want to see the State Insurance Commissioner do his job and correct this," said Bobo. "I want to see the local assessor's office check to see how many homes need to be inspected. Every homeowner needs to check their policies, and check with the county, to see if their ISO matches what's on their policies. I got almost $300 back from the company I'm using, and I got $71 back from the IRS (Internal Revenue Service)."
In some cities and counties, there are differences in ISOs, according to Bobo. Fire officials in Henry and Clayton agree. Steve Manders, director of Insurance Product Review at the office of State Insurance and Safety Fire Commissioner, Ralph Hudgens, said his agency has received reports in recent years, statewide, with concerns similar to those expressed by Bobo.
"In some jurisdictions, it's not going to come into play," Manders said. "For instance, in Atlanta, the rating is a 2, regardless of where you are in the city.
Manders added that, in past years, authorities, sometimes, estimated a home's fire rating without calculating its exact distance from a fire department. The advent of global-positioning systems and other technological services, have enabled them, within the last two years, to minimize the risk of human error when calculating a home's distance from a fire department, he said.
"What we're seeing is that polices that were mis-rated before, and receiving a lower protection class, are now being re-rated, using the correct protection class," said Manders.