Those with Poor Credit Pay Over Twice as Much for Homeowners Insurance

For those who take out a homeowners insurance policy – a prerequisite for purchasing a home – they often wonder what they can do to lower their rates. They might make upgrades such as adding a security system, but a recent study conducted by Quadrant Information Services and InsuranceQuotes shows that your credit score plays a significant role.
Just how much more are you paying as a result of your credit score? If you have a fair credit score, under 620, you pay about 36% more than what someone with an excellent score in annual premiums. When your score dips into “poor” territory, be ready to pay up to 114% more on average.
However, in a state-by-state analysis, this disparity varies greatly. For instance, in South Dakota poor credit can increase your annual premiums as much as 288.1%. On the other hand, Connecticut falls in the average range. Here, the difference between what a homeowner with an excellent credit score and someone with poor score pays is equal to 114.92% more.
Unfortunately, these increases overlap with higher rates from insurance carriers. The study further found that the average jump for premiums rose from 29% in 2014 to 32% in 2015.
So, what options does a homeowner have to lower his or her rates? For one, experts suggest shopping around, especially as carriers use different factors to calculate their premiums. While you can also make sure you’ve got a safe, up-to-date home, the other equally crucial aspect is to work on improving your credit score.
If your premiums have drastically jumped from year to year, explore your options with an agent at Ion Insurance. To learn more, give us a call at 203.439.2815.