This is Part V of our seven-part series on Understanding Rule 85. In this series, we delve into the intricacies of Rule 85 and its implications for property insurance.
Not all buildings qualify for class rating under Rule 85. Some structures, due to their unique hazards or operational risks, must undergo more specialized evaluations. Here, we explore which buildings fall into this category and the reasons why they are considered ineligible for class rates.
Buildings ineligible for class ratings
The following types of buildings are typically excluded from class rating due to the higher risks they pose, either because of their contents, operations, or inherent hazards:
Homes and Farms
Residential buildings, including farmhouses and other agricultural properties, require different rating methods due to their unique risks, such as large property size and livestock.
Auto Work
Garages, body shops, and other auto-related businesses are ineligible because of the flammable materials, chemicals, and equipment they store.
Woodworking
Businesses that deal with woodworking generate significant amounts of dust and store flammable materials, increasing the fire risk.
Commercial Cooking
Restaurants and food processing plants are excluded due to the high risk of grease fires and the use of specialized cooking equipment.
Explosive Contents
Any building storing or using explosives, such as fireworks shops or factories, presents clear dangers that exceed the thresholds for class rating.
Greenhouses
Due to their construction materials and reliance on heating equipment, greenhouses pose unique risks that make them ineligible.
Trailer Parks
With fluctuating occupancy and less permanent structures, trailer parks require a different insurance evaluation process.
Schools
Educational institutions, particularly those with larger student populations, demand specialized risk assessments given their size and complexity.
Vacant Buildings
Empty or abandoned structures are prone to vandalism, deterioration, and fire, making them ineligible for class rating.
Lumber Yards and Sawmills
Both of these present extreme fire hazards due to the storage of large amounts of wood and combustible materials.
Recycling Centers and Junk Yards
The nature of the materials stored, including scrap metal and flammable items, creates significant risks.
Dumps
Waste disposal sites, by nature, are high-risk due to the mixture of materials and the possibility of fires and environmental hazards.
Oil Distribution
Oil storage and distribution centers store large quantities of flammable liquids, making them unsuitable for class rating.
Special considerations
Many of these ineligible buildings fall under categories where operations, construction materials, or the contents stored significantly increase the risk of fire, structural damage, or other hazards. The additional complexity in these environments means they require more detailed and specialized insurance evaluations rather than the simplified class rating system.
