TUESDAY, JUNE 23, 2020
 Renters insurance rates are calculated depending on many factors, one of which is your credit score. As you know, insurance agencies use your credit score as a factor in most insurance policies, such as home, motorcycle and auto insurance policies. So why does your credit score matter when it comes to insurance?
Insurance agencies base insurance rates primarily on risk. Risk relates to the risk an insurance agency takes when insuring a client. Most risks are toward the insurance agency losing money due to claims. This means that the higher likelihood that a client will file a claim means the higher likelihood that the insurance agency will have to pay, and thus they charge more for insurance to balance out that risk.
Credit scores indirectly affect this level of risk. A person’s credit score is seen as their level of reliability when it comes to paying their bills in full and on time. Having a history of missing payments or being late can lead an insurance agency to believe you will do the same if they sign you onto a policy. Low enough credit scores may be rejected by most insurers, while other insurers will charge high rates.
There is also a direct correlation between low credit scores and high numbers of insurance claims. Overall, insurance agencies consider and calculate renters insurance based on credit in order to deduct responsibility and risk limits of potential clients.
Saving Money on Renters Insurance with Bad Credit
You can build up your credit by paying off loans, debts, and credit cards, but it often takes a while. Thankfully, there are other factors that influence renters insurance that you can use to lower your ratees.
Location
Before moving into an apartment or rented home, shop around and check quotes in the surrounding areas. Rates vary not only per state, but per city. This is in part due to the city’s history of property claims, crime rate and cost of living.
Coverage Limits
Landlords often require renters to carry a certain amount of insurance as part of their leasing agreement, but these limits generally aren’t high. Keeping your coverage to the required amount can save money, although it does leave you open to loss. You can also raise your deductible in exchange for lower monthly premiums, but this means paying more out of pocket after filing a claim.
No Comments
Post a Comment |
|
Required
|
|
Required (Not Displayed)
|
|
Required
|
All comments are moderated and stripped of HTML.
|
|
|
|
|
|
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only.
It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional
in your state. By using this blog site you understand that there is no broker client relationship between
you and the blog and website publisher.
|