National Board Of Fire Underwriters

What Does National Board Of Fire Underwriters Mean?

The National Board of Fire Underwriters was established in 1886 with the goal of preventing fire-related losses and protecting property and lives from fire hazards. The organization collected statistics from fire incidents across the United States to create a framework for fire insurance.

Insuranceopedia Explains National Board Of Fire Underwriters

This group is historically significant for establishing standards for fire coverage. It achieved this by gathering fire-related statistics from across the country and using the data to determine premium charges and coverage. Today, most homeowners get their fire coverage as part of a standard homeowners insurance policy rather than buying a separate fire policy.

The group also classified property and its use, such as residential or commercial property, a method still employed by companies today, as different types of property (and their uses) carry distinct inherent risks. That same split still decides which type of policy applies, with homes covered under homeowners insurance and businesses covered under commercial property insurance.

In the mid-1960s, the board was absorbed by the American Insurance Association. By 1971, its program was transferred to the Insurance Services Office, which became responsible for calculating insurance rates.