Home owners who have poor credit pay 91 percent more for homeowners insurance than those who have stellar credit, according to a new report from Brankrate.com and insuranceQuotes.com.
Home owners with a fair or median credit score may pay 29 percent more for homeowners insurance than someone with stellar credit, according to the report.
“This is another example of why credit is such an important part of your financial life,” Laura Adams, senior analyst with insuranceQuotes.com, told CNBC. “Maintaining a good credit history suggests that you’re a less risky customer and can lead to several hundred dollars in annual homeowner’s insurance savings.”
How insurance companies weigh a person’s credit score can vary greatly from company to company and even state to state. There is no standard for how insurers figure credit into insurance costs, per the report. (California bans the use of credit in setting rates.)
“I’m pretty shocked that even with a so-called fair credit score, you could still wind up paying 50 percent more than someone in the excellent category,” says Bob Hunter, former Texas insurance commissioner and current director of insurance at the Washington, D.C.-based Consumer Federation of America. Your comments?
Source: “If You Have Poor Credit, You May Pay Nearly Double for Home Insurance,” InsuranceQuotes.com (Aug. 14, 2014) and “How Poor Credit Costs You on Homeowners Insurance,” CNBC (Aug. 14, 2014)