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Home insurance affected by credit activity

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My increased MS and churning may have caught up with me. I just received the annual billing for my home insurance. Between statewide increases for other factors and the insurance score, my annual home insurance price increase was about 30%. They ran my credit on TransUnion in May 2017.

https://extramile.thehartford.com/auto/insurance-credit-score 
https://www.thehartford.com/resources/insurance-score 
The above link also discusses home insurance. Not much we do not know about FICO and the like. The following factors were of interest to them:

YOU APPLIED FOR CREDIT AT A FREQUENCY THAT RESULTS IN A HIGHER PRICE

YOU OPENED MORE ACCOUNTS THAN IS OPTIMAL

LOW CREDIT LIMITS (April 2016 AppOrama effect)

YOU HAD A BALANCE ON YOUR REVOLVING ACCOUNTS.

Member Summary
Most Recent Posts
Credit scores and activity should be banned from insurance decisions. I'm sure that much of the so called "correlations"... (more)

LOOPHOLE (Aug. 03, 2017 @ 8:49a) |

On my most recent A-H-U renewal, my rates dropped by almost 30% due to my credit score. My agent even called me to let ... (more)

busnut (Aug. 03, 2017 @ 3:13p) |

Not all insurers use your credit scores in the same way. But by now, all of them have your scores factoring into your pr... (more)

Shandril (Aug. 14, 2017 @ 1:10p) |

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Tis the world we live in these days. Good credit enjoys lower premiums. One of a hundred factors they use to determine your insurance premium.

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P+C wouldn't be trying to use these factors if they did not have a confirmed correlation to risk. My guess is a combination of adverse selection and moral hazard as DI ratio increases.

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Auto insurance also looks at your credit report. Keeping a high credit score is not valuable just for getting loans, but for auto, home, rental, and even health insurance. Health insurers sometimes look at credit reports because people with debt problems are at higher health risk.

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Shop it around.

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I only opened two cards last year, an Amazon. com card and a Chase IHG card, and I got a note on my renewal notice with Amica that too many new lines of credit was a reason for a 15% increase on my homeowners policy. No app-o-rama..just two cards and the Amazon card is literally $500 limit. I shopped around and found Geico to be 70% cheaper.

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JW10, what kind of score do you think you had at that time?

I expect many of us usually have great credit scores AND warning flags like lots of inquiries, account openings, (zero percent) balances well over 30% of credit limits. If they would just go by credit score, I'd be confident of avoiding any higher pricing. Still good to know and keep in mind when renewing or shopping for new policies.

If "strange activity" gets rate increases, that's a tough one to work around.

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nthony said:   I only opened two cards last year, an Amazon. com card and a Chase IHG card, and I got a note on my renewal notice with Amica that too many new lines of credit was a reason for a 15% increase on my homeowners policy.Thanks for this info. I was gonna get a quote from Amica, now I won't.
ETA: I guess I will, since I'm in CA and BostonOne says below that CA doesn't allow this practice.

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SlimTim said:   JW10, what kind of score do you think you had at that time?

I expect many of us usually have great credit scores AND warning flags like lots of inquiries, account openings, (zero percent) balances well over 30% of credit limits. If they would just go by credit score, I'd be confident of avoiding any higher pricing. Still good to know and keep in mind when renewing or shopping for new policies.

If "strange activity" gets rate increases, that's a tough one to work around.

  Depends when in May they pulled it.  It ranged from about 720 to 840 (FICO8).  I had a few BTs in force that were paid in full,  I paid off a couple of CCs.  I applied for two CCs.  Both provided very high CLs compared to my other cards.

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Argyll said:   Auto insurance also looks at your credit report. Keeping a high credit score is not valuable just for getting loans, but for auto, home, rental, and even health insurance. Health insurers sometimes look at credit reports because people with debt problems are at higher health risk.
  Whether auto insurance looks at your credit report varies by state. California, Massachusetts & Hawaii prohibit it.

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OP, were the MS and card churning worth more than the 30% increase in insurance? I'm just curious.

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BostonOne said:   
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  Whether auto insurance looks at your credit report varies by state. California, Massachusetts & Hawaii prohibit it.

  
Oregon prohibits increasing rates based on credit history for any form of insurance.
 

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samko said:   OP, were the MS and card churning worth more than the 30% increase in insurance? I'm just curious.

Great question (and it's really the only thing that matters)!
Obviously only the OP can answer regarding his particular circumstances, but if my homeowners insurance were to go up 30% and I didn't bother shopping around to find something cheaper, the increase would be less than the bonus on ONE credit card.

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jerosen said:   
BostonOne said:   
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  Whether auto insurance looks at your credit report varies by state. California, Massachusetts & Hawaii prohibit it.

  
Oregon prohibits increasing rates based on credit history for any form of insurance.

I do not know anything about Oregon, but just as a word of caution to folks, if the law is phrased as prohibiting rate increases based on credit history, it will frequently be construed as allowing insurance carriers to provide discounts to those with "better" credit histories. I know that this is definitely the case (or at least used to be, as I haven't kept up with the changes) in a number of states, where insurance carriers are not allowed to surcharge people based on their credit histories, but are allowed to give discounts based on them. Not qualifying for a discount based on your credit history is a functional equivalent of a penalty.

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geo123 said:   
jerosen said:   
BostonOne said:   
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  Whether auto insurance looks at your credit report varies by state. California, Massachusetts & Hawaii prohibit it.

  
Oregon prohibits increasing rates based on credit history for any form of insurance.

I do not know anything about Oregon, but just as a word of caution to folks, if the law is phrased as prohibiting rate increases based on credit history, it will frequently be construed as allowing insurance carriers to provide discounts to those with "better" credit histories. I know that this is definitely the case (or at least used to be, as I haven't kept up with the changes) in a number of states, where insurance carriers are not allowed to surcharge people based on their credit histories, but are allowed to give discount based on them. Not qualifying for a discount based on your credit history is a functional equivalent of a penalty.

  

Oregon law does not allow them to use credit information in rerating.   Good or bad, they can't even look at it.    

unless you specifically ask them to rerate you with your credit info and give them permission, which might benefit you if you've got stellar credit, but you have to call them up and ask them to rerate you and give authorization to use your credit.  And if rerating doesn't help you then they can't jack premiums for it.
I don't think people requesting rerating is really at all common so I don't think it has a lot of impact.


 

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samko said:   OP, were the MS and card churning worth more than the 30% increase in insurance? I'm just curious.
  The rate increase was covered by one $400.00 Chase bank sign up bonus.  I just had other plans for that money since the credit rating factor was NOT factored into my game plan.  Therefore, yes, I did more than enough MS and card churning to cover it.  I think I did about 8-10 bank sign up bonuses (most paid less) in that time, plus a few new cards plus $12.000 GCs of MS in just the second calendar quarter.

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JW10 said:    Between statewide increases for other factors and the insurance score, my annual home insurance price increase was about 30%. 
  So does that mean you don't really know if MS caused it? Maybe statewide increases, other factors and the insurance score caused the increase?

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Caused the whole 30% increase? No, it did not. Contributed to it? Most certainly based on my OP list if credit factors.  How much? They would not break it down except to say more favorable levels do exist.

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Credit bureaus isolate certain aspects of your credit score and then calculate them in a special credit-based insurance score. Insurance scores are not made publicly available. So the score you see from the credit bureau is not the same as what the insurer is looking at.

The use of these varies from state to state. Some states prohibit the use of credit scores in rate determination. My state allows it for determining the premium but not for denying an application or raising rates.

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JW10 said:   Caused the whole 30% increase? No, it did not. Contributed to it? Most certainly based on my OP list if credit factors.  How much? They would not break it down except to say more favorable levels do exist.
  Why mention the bank bonus signups? They don't go on your credit report. I doubt insurance companies are looking at chexsystems to determine your insurance rate. Trying to scare people away from those bank bonuses? lol

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One question I'm curious about, but I realize this may be difficult to determine specific factors; whether this could have been avoided if you didn't carry high balances.

I've done MS where I've wanted the balance to post for sign up bonuses before paying off the balance in full. I've also occasionally paid off the balance on the credit line prior to closing so I could MS two or three times the credit line in one month, where the balance would not be reported to the credit bureaus. I've always noticed more negative impact, both to credit scores and those that pull reports when I carry high balances that are not paid off in full every month. The only time this occurs is when I do 0% BT's or take advantage of 0% on purchases upwards of 80% of the credit line.

I wonder if you may have been able to fly below the radar if your credit score remained above the soft 740 or 750 line and you hadn't carried high limit BT balances. The bigger question of course is always whether the reward is greater than the risk and usually it is. Thanks for posting OP. Data points like these are always great to have as a caution and to identify changing trends for risk tolerance.

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nthony said:   I only opened two cards last year, an Amazon. com card and a Chase IHG card, and I got a note on my renewal notice with Amica that too many new lines of credit was a reason for a 15% increase on my homeowners policy. No app-o-rama..just two cards and the Amazon card is literally $500 limit. I shopped around and found Geico to be 70% cheaper.
  
You can re-allocate more to the Amazon card -- I moved line from another Chase card to increase $500 to something useful.  I think it was my old Freedom card.

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meade18 said:   
JW10 said:   Caused the whole 30% increase? No, it did not. Contributed to it? Most certainly based on my OP list if credit factors.  How much? They would not break it down except to say more favorable levels do exist.
  Why mention the bank bonus signups? They don't go on your credit report. I doubt insurance companies are looking at chexsystems to determine your insurance rate. Trying to scare people away from those bank bonuses? lol

  I mention it as a MS activity that earned enough to cover that expense.  Some Bank activity allows CC deposits.  True .. My Chase action may not have been considered by the events related to the insurance rating.  It was one on my larger MS events that paid enough to cover it.  Another member asked if I had enough action to be worth it.  I was answering that FW member.

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Corndogg said:   One question I'm curious about, but I realize this may be difficult to determine specific factors; whether this could have been avoided if you didn't carry high balances.

I've done MS where I've wanted the balance to post for sign up bonuses before paying off the balance in full. I've also occasionally paid off the balance on the credit line prior to closing so I could MS two or three times the credit line in one month, where the balance would not be reported to the credit bureaus. I've always noticed more negative impact, both to credit scores and those that pull reports when I carry high balances that are not paid off in full every month. The only time this occurs is when I do 0% BT's or take advantage of 0% on purchases upwards of 80% of the credit line.

I wonder if you may have been able to fly below the radar if your credit score remained above the soft 740 or 750 line and you hadn't carried high limit BT balances. The bigger question of course is always whether the reward is greater than the risk and usually it is. Thanks for posting OP. Data points like these are always great to have as a caution and to identify changing trends for risk tolerance.

  
I think that's very true since I have over 3X my income in unsecured credit, as do many FWF members, and had a perfect or near perfect credit score until I started running up my 0% intro rate on my BoA Travel Rewards. Once it crossed the 50% credit limit threshold my score dropped to the mid 700's. 

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A single account with > 50% utilization took off 100 points? That's good to know. What was the total utilization ratio then?

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JW10 said:   
meade18 said:   
JW10 said:   Caused the whole 30% increase? No, it did not. Contributed to it? Most certainly based on my OP list if credit factors.  How much? They would not break it down except to say more favorable levels do exist.
  Why mention the bank bonus signups? They don't go on your credit report. I doubt insurance companies are looking at chexsystems to determine your insurance rate. Trying to scare people away from those bank bonuses? lol

  I mention it as a MS activity that earned enough to cover that expense.  Some Bank activity allows CC deposits.  True .. My Chase action may not have been considered by the events related to the insurance rating.  It was one on my larger MS events that paid enough to cover it.  Another member asked if I had enough action to be worth it.  I was answering that FW member.

 
You opened a Chase bank account for the bonus and funded the account with your credit card as MS? How much are you talking here?
 

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If your a vet check out USAA

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All insurance is determined by your credit...............

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Credit scores and activity should be banned from insurance decisions. I'm sure that much of the so called "correlations" are dubious at best but if the insurance industry can make a buck they'll use any thing they can get their hands on. All insurance companies are not the same, however and they may have done you a favor because I've had similar nonsense occur and Iv ended up paying less than the previous company and this was at the "old policy rate" prior to their absurd jacking they attempted to foist upon me. Then after I left they tried to get me back, needless to say I told where to go...

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On my most recent A-H-U renewal, my rates dropped by almost 30% due to my credit score. My agent even called me to let me know the reason of my rate decrease.

I guess it's true, the higher your credit score, the lower your rates.

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Not all insurers use your credit scores in the same way. But by now, all of them have your scores factoring into your premium to some extent.

So it's not a question of whether it affects scores but by how much for each insurer. So if your credit score has changed a lot (both down and up), it's definitely time to shop around because your insurer may not give you enough credit from improving your score or penalize you too much for a drop in score, compared to other insurers.

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