Credit scores affect many things in our lives both positively and negatively.
Those who have good credit scores seem to get more out of life than those who do not. Even with bad credit, many companies will still sell you their product, just at a higher rate to offset the risk on their end, of taking you on as a customer.
Here are a few things that you should know about your credit score and how it affects your home insurance policy.
DOES CREDIT SCORE AFFECT HOME INSURANCE IN CANADA?
The long and short of it is that it does not affect your eligibility for insurance.
According to Insurance Hero, what it does affect are the rates and discounts that you would be eligible for. That means, in general, the higher the score, the better the rate.
Some companies are more likely to take you on as a client with a better credit score but it does not mean that no one will if your credit is not ideal.
WHAT ELSE IMPACTS MY HOME INSURANCE RATE?
There are a few things that can affect the price you pay for your insurance:
- The value of your home – the more expensive your home is, the higher the insurance will be.
- Who is living in your home – is this house going to be your primary residence? Are you going to be renting the house? Is it still under construction?
- Type of home – the year the home was built, the materials used to build and the outbuildings on the property all play a part in your rate.
- Recent upgrades – are there upgrades that have been done recently? Are there upgrades that need to be done to improve the safety of your home?
These can all play a factor in your home insurance rate and should be considered thoroughly before buying a home and finding the right insurance agency for your needs.
CAN I IMPROVE MY HOME INSURANCE POLICY RATE?
It is not impossible to improve your home insurance policy rates.
By having a policy with no claims for an unbroken period, your policy can be reviewed and appropriate discounts applied. Your risk rating lowers the longer that you go without a claim which makes you a better candidate for a lower rate.
Here are some other ways you can try to reduce your rates, according to the Insurance Bureau of Canada:
- Ask about bundling – bundling products is one of the best ways to bring your costs down The more you bundle, the more you save.
- Increase the deductible – this is what you pay if and when you have to make a claim. The more you pay into this, the lower your premium is. Just be sure not to make it so high that you may not be able to pay it in the future.
- Prevention – installing fire alarms, security systems, backup sewer drains and other items like this, decrease the need to claim in the future and increase your insurability.
- Paying annually – paying monthly requires more work so there are more costs involved, while paying annually saves you some money on interest charges and service fees.
- Evaluate, evaluate, evaluate – review your policy when it comes time for renewal to make sure that all the information about your home is up to date and accurate. Make your evaluation include improvements that you have made and any new safety measures that you have updated.
Home insurance rates may be increasing but there are many ways to bring yours to a reasonable level. Overall, make sure that your rates are something that you can afford even if something happens and there is a hiccup in income.
Always talk with your insurance company and ask any questions that you may have so that you are comfortable with the coverage that you have and the premiums that you are paying.
Erie Mutual Insurance proudly serves the commercial insurance, farm insurance, home insurance and auto insurance needs of members throughout Southern Ontario including Haldimand, Niagara and Hamilton.
Please don’t hesitate to contact us with any questions you may have about this or any other topic related to your insurance.
