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Homeowner’s Insurance Costs Nearly Twice as Much with Poor Credit

Three States Ban Insurers from Using Credit to Set Rates

SAN FRANCISCO – August 14, 2014 – Homeowners with poor credit pay 91% more for homeowner’s insurance than people with excellent credit, according to Homeowners with median credit pay 29% more than those with excellent credit.

People with poor credit pay at least twice as much as people with excellent credit in 37 states and Washington, D.C. West Virginia’s 208% increase is the highest in the nation, followed by Virginia (186%), Ohio (185%) and Washington, D.C. (182%).

The greatest differences between excellent and median credit were observed in Montana (65%), Washington, D.C. (60%) and Arizona (55%).

“This is another example of why credit is such an important part of your financial life,” said Laura Adams, senior analyst, “Maintaining a good credit history suggests that you’re a less risky customer and can lead to several hundred dollars in annual homeowner’s insurance savings.”

Three states prohibit insurers from using credit to calculate homeowner’s insurance premiums: California, Massachusetts and Maryland. And in Florida, while insurance companies are technically allowed to consider homeowners’ credit scores, found that credit does not typically affect premiums.

Florida’s hurricane-prone location means that homeowners pay the highest homeowner’s insurance rates in the nation ($1,933 per year, which is almost double the national average of $978, according to the National Association of Insurance Commissioners). Since hurricanes play such a major role in Florida’s homeowner’s insurance market, credit is a lesser concern.

According to the NAIC, about 85% of home insurers use credit-based insurance scores in states where it’s allowed.

More information, including the findings for all 50 states and Washington, D.C., is available here: commissioned Quadrant Information Services to examine how credit affects homeowner’s insurance premiums. Quadrant calculated rates using data from six major carriers representing approximately 60% of market share in all 50 states and Washington, D.C.

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For More Information:

Laura Adams

Senior Analyst,