NEW YORK – May 8, 2017 – Homeowners with a bad credit score can expect to pay double – in some cases, even nearly triple – what owners with solid credit pay for their home insurance, according to a new state-by-state study by insuranceQuotes.
Policyholders with fair credit pay an average of 36 percent more than those with excellent credit, the study found. When a consumer’s credit is poor, premiums can more than double, increasing an average of 114 percent.
“Many consumers aren’t even aware that, in most states, credit plays a significant role in determining how much you pay for home insurance,” says Laura Adams, senior insurance analyst of insuranceQuotes. “So, even if you don’t plan on using credit to borrow money, it still affects your finances.”
Consumers in these states saw the greatest spike in home insurance premiums when their credit was poor:
- South Dakota: 288.1%
- Arizona: 268.6%
- Oklahoma: 248%
- Nevada: 235.3%
- Oregon: 234.9%
On the other hand, consumers in these states saw the smallest increase:
- North Carolina: 0.2%
- Florida: 25.7%
- New York: 29.3%
- Wyoming: 43.9%
- Hawaii: 53.1%
The list excludes California, Massachusetts, and Maryland, which prohibit the use of credit scores when setting home insurance rates, the authors note.
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