Is Your Poor Credit Score Affecting Your Home Insurance?

A poor credit score can affect more things than your ability to get a mortgage, because it can have a negative impact on your home insurance rate too; this according to a new analysis released in the New York Times.

The Effect of Poor Credit

A report of an insurance comparison website – – showed that Americans with poor credit will see their insurance premium double; this compared to Americans with a good credit rating.

Your current poor credit might not be the only influence though, because analyses in the past have shown that poor credit history can also impact your current home insurance rates.

Average Credit Scores Are Affected Too!

If you believe you are getting a good deal on your insurance premium because you have an average credit score, you would be wrong. According to comparison websites, Americans with a fair to average credit score pay 36% more than people with a good credit score; this is a whopping increase of 4% compared to 2015 and a 7% increase compared to 2014!

The increase for people with poor credit is quite dramatic too! Now, people with poor credit experience an increase of 114% on their insurance premium; this compared to 100% in 2015 and 91% in 2014.


Before you check your own insurance premiums based on these numbers, it is important to realize that there are certain variables. The numbers stated above are the national average, based on a theoretic 45-year-old woman with a two-story 1976 built home. The evaluation also included a hypothetical $140,000 dwelling coverage, $300,000 liability coverage and $500 deductible.

Insurance Score Vs. Credit Score

The insurance score and credit score are remarkably similar, because both are based on your credit report. However, the scores for each one are calculated differently, because some insurance agents work with additional variables such as their own proprietary formula. As a result, the insurance score you get from a certain insurance company could vary from another.

Biggest Average Increases

Despite the fact that the released numbers are incredibly high already, there are still states that have an even bigger increase than the average recorded earlier.

Out of all the states, the states with the biggest average increases on insurance premiums were South Dakota, Arizona, Oklahoma, Nevada and Oregon. These states were in sharp contrasts with the small increase states; this includes North Carolina, Florida, New York and Wyoming.

The Elimination of the Credit Score for Insurance Premiums

Americans should be aware that not all states use credit score to determine their insurance premium, because there are three states who do not incorporate this information in their decision; this includes California, Maryland and Massachusetts. Therefore, if you have a poor credit score and reside in one of these states, you might still get a good deal on your insurance premium.


Since the insurance premium can be heavily impacted by a poor credit score, it is essential to get your credit score up if you want to save some money in the future. Our readers can find valuable tips on how to increase their credit score on our website, but they can also obtain the services of an experienced financial adviser to correct any problems.


Disclosure: The information provided by The Financial Genie is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs. The Financial Genie does not make any guarantee or other promise as to any results that may be obtained from using our content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. Additionally, some of the organizations with products on our site may pay us a referral fee or affiliate commission when you click to apply for those products.

  • Categories

  • Leave a Comment