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Credit Score & Homeowners Insurance

Florida homeowner insurance rates too high to factor in credit

Florida homeowners are inflicted with the highest homeowner insurance premiums in the country. However, unlike many other states, their credit score does not affect the home insurance rate. Out of 47 states where credit is legally factored into an individual’s home insurance, Florida is the only state boasting a zero percent effect.

To put this further into perspective, here are a few homeowner insurance rate changes that took place in other states when an individual’s credit went from excellent to poor. West Virginia residents saw an increase of 202 percent, from $771 to $2,331, while those in Georgia experienced a 130 percent hike, from $975 to $2,445.

Why is Florida not affected?

Laura Adams, a senior analyst at Bankrate company InsuranceQuotes.com, explains why insurance companies in Florida are not using credit history to spike rates, “I can only speculate that because Florida premiums are already the highest in the country, that giving people further increases for low credit might be outside the realm of what’s possible for homeowners in the state.” She also points out that while Florida companies are not allowing credit to be a pricing factor, this doesn’t mean that they are not looking at scores. It is also noted that Florida insurance costs have been historically affected by catastrophic losses such as hurricanes, rebuilding costs, and how close a property is to the coast.

It is definitely a blessing for some and a curse for others that homeowner insurance is unaffected by credit scores in the sunshine state. Clearly, it could be very advantageous for those with good credit ratings. On the other hand, with such high premiums, it would be detrimental for those homeowners with credit issues if their credit were ever a factor. What we can gather from this information is that being a homeowner in Florida can be far more challenging than in other states.

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