Homeowners Insurance Survival Blueprint: Insider Secret #6

The latest scoop from my 7-part blog series on the looming homeowners insurance market…stay informed!

Your Credit Score Could Ruin Your Homeowners Insurance Rate


Did you know that? It’s called “insurance scoring” and it includes taking your credit score and basing your homeowners insurance rate on that “insurance score”.

Why in the world would an insurance company jack your rates up if you have poor credit? Trust me, I’ve been there. I took out a credit card in my college days and it made me a pretty popular person at the local Regal Beagle…but flash forward 10 years later and I can tell you that missing payments on a credit card can crush your score and take years to repair the damage done.

And statistics have shown that people with a lower credit score are more likely to turn in claims more frequently and don’t always pay their insurance premiums in a timely fashion.

Does it make you a bad person to have a low or “worse than par” credit score? Of course not. But the reality is that for the unforseeable future (how’s that for insurance agent talk) that’s just part of the rating system insurance companies are going to use.

I’m not here to judge and to be perfectly honest, as an agent we don’t see your credit score. Each company is different but the ones I work with assign you to a particular tier or letter within the homeowners insurance program and from there a rate is assigned.

Also good to note, your credit score is not negatively affected when your score is ran by the insurance company either.

TIP: Keep informed on your credit score by going to www.annualcreditreport.com and get a free credit report from each of the top 3 credit reporting companies. You can do this every 12 months for free.

TIP: Every few years ask your agent to re-rate or re-run your credit report through the insurance company, I know we can do that here at Hays Insurance Agencies and if your score has improved then the company will bump you up in the tiers which means you get a better rate…save some moola!

This is “Insider Secret #6″ in my 7-Part blog series on how you can prepare and survive the looming homeowners insurance crisis in 2012.

If you’d like me to mail you my full Urgent Report (a $97 value), click here and include your name and home mailing address. Your information will not be sold or compromised.