If you own a house, you probably know you should have homeowners insurance. Bad credit can have an impact on this, as it can on any financial transaction. However, there are options available to most homeowners, and knowing the ways that credit score can impact your rates and coverage is wise.
What Impacts Insurance Rates?
There are a number of variables that affect homeowners coverage and rates, including:
- home construction
- property location
- access to hydrants or fire response
- age of home and assessed value
In addition to these universal factors, insurers may consider credit scores to judge the level of risk in offering a policy, and the likelihood that the policy holders will experience loss or file claims.
Why Is Homeowners Important?
Insurance on your home protects you and your property in the event of damage and loss. Most policies cover natural damage, such as fire, lightning or storm-related damage, and losses due to theft, vandalism or arson. Depending on where your property is located, you may also want special types of riders for flooding or tornadoes.
Having a low score may affect your rates, but most property owners are able to secure homeowners insurance. Bad credit may influence the brokers or policies available to you, but establishing a policy and keeping it up to date can be a step toward improving your credit score and overall financial stability.