NEW ALBANY — Potentially lowering insurance premiums for commercial, industrial and residential customers, the New Albany Fire Department has earned a drop in its Insurance Standard Office rating.

In this case, the lower the better. The fire department’s ISO classification has dropped from four to three, as only about 40 communities in the state have an equal or lower rating.

“Basically the lower the number the better the insurance rating,” New Albany Fire Chief Matt Juliot said.

ISO representatives rate fire departments and coverage areas every 10 years, Juliot said.

“You go through an extensive evaluation inspection of your department,” Juliot said.

From fire equipment to records documenting training hours, he said the ISO exam is rigid.

“They rate every community based off of their water supply and their fire protection,” Juliot said.

It’s about an even split between the two factors, he continued. As the rating is based on a points system, Juliot said the fire department has focused on recommendations from the last report in order to bring down the rating.

“In the last 4 1/2 years, my staff and I have been working to improve every deficiency our department had as far as communications equipment and training,” Juliot said. “Those were the areas where we needed to make improvements and where we could make up the most points.”

The impact of a lowered ISO rating can potentially be great for businesses and industries, and can serve as an economic development tool, Juliot said, especially considering the city is moving forward with the opening of Grant Line Industrial Park West.

And the NAFD’s coverage area isn’t limited to New Albany. For example, the department has the contract to provide fire coverage to Horseshoe Casino just inside Harrison County, which Juliot said is based largely on the NAFD’s service quality and rating.

Juliot said the ISO rating drop is the result of a lot of hard work from firefighters and NAFD administrative staff. Mayor Jeff Gahan also credited the NAFD for its capabilities.

“Over the last six months or so, our fire department as well as our other departments have been extremely focused on their service to the community,” Gahan said Thursday. “And it’s apparent that it’s paying off in the fire department.”

As for the next ISO review in 10 years, Juliot said the fire department has pretty much addressed all the issues it can in terms of lowering the rating. He said in order to get the ISO level to a two — which only one department in Indiana has earned according to Juliot — there would have to be changes to the water system and supply.

He estimated such improvements could cost millions of dollars and likely wouldn’t be feasible. But he stressed a two ISO rating distinction is almost impossible to achieve.

The number of fire hydrants in a community, the size of water mains and the amount of water available in an emergency are among the water factors reviewed for ISO ratings, Juliot said.

“We have an excellent water system in this city,” he added.