This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Homeowners Insurance Cost Too Much? Check Your Bad Credit

NEW YORK (TheStreet) — The cost of homeowners insurance is rising steadily, at a 50% clip over the past 10 years.

Average costs vary state to state, with Idaho at the lowest cost on average, $518 per year, and Florida homeowners paying the most, $1,933 per year.

Weather, a home's size and its neighborhood are all factors when companies price homeowners insurance. But there's an-under-the radar factor that can move homeowners insurance upward: bad credit.

Read More: Key to Quick Insurance Claim Turnaround? Doing a Home Inventory

According to InsuranceQuotes.com, homeowners with lousy credit can pay up to 91% more. Even having mediocre credit can hurt you with homeowners insurance — bringing payments 29% more, on average, then those of consumers with excellent credit.

Again, prices vary on a state by state. In West Virginia, for example, people with poor credit pay 208% more than those with stellar credit. Virginia, Ohio and Washington, D.C., also post high rates on homeowners insurance for consumers with bad credit.

Consumers with a toxic credit score catch a break in three states: California, Massachusetts and Maryland. In those states, insurance companies are barred from using credit to calculate homeowners insurance.

In some states, weather trumps credit. For example, in Florida, where homeowners' insurance rates are twice the national average, hurricane risk is a much bigger factor than credit, Adams notes.

To insurers, the equation is all about risk — the less of it the better.

Read More: 3 Tips on Getting a Higher Credit Card Limit

"This is another example of why credit is such an important part of your financial life," said Laura Adams, a senior analyst at InsuranceQuotes.com. "Maintaining a good credit history suggests that you're a less risky customer and can lead to several hundred dollars in annual homeowners insurance savings."

To try and curb rising homeowners insurance rates due to bad credit, make sure to check your credit score on a regular basis (you can get a free copy of your credit report at annualcreditreport.com.)

Check for errors and unpaid bills and resolve those issues as soon as possible. Contact your insurance company as your credit rating improves. You may be able to cut a new deal based on a better credit rating, but you'll never know for sure until you talk to your insurer.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $124.75 0.00%
FB $80.78 0.00%
GOOG $524.05 0.00%
TSLA $206.79 0.00%
YHOO $44.45 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs