Credit plays a major factor in the amount you will pay for auto or home insurance. There are many factors, but all things being equal a good rule of thumb is that there may be as much as 100% difference in pricing from the low end of the credit score to the high end.
Do insurers check credit on new customers?
Yes, most insurers run credit on all new customers, but it is important to know that they run an “insurance score” and not a “credit check.” Insurance companies run a “soft” check that has no impact on your future credit rating, unlike applying for a credit card or mortgage. You could get ten insurance quotes a day, every day and it would not have an adverse impact. Insurance companies use elements of credit and the scoring system is unique for each company and not directly tied to your FICO score. Typically, a high FICO score will correlate with a good insurance score, but they are not the same.
If you have poor credit and are on an older insurance policy it may be advantageous to stay on your current policy because it is not credit based.
Why do insurers check credit?
Insurers use credit because there has been a strong statistical correlation in credit and predicting future losses. Since insurance companies began using credit scoring many have increased its use because it is has proven to be a good tool for predicting risk.
Does credit affect all types of insurance?
Over the last five years the use of insurance scores has increased for property and casualty insurance (Auto, Home, Boats, etc). As far as we know credit scoring is not used in rating health and life insurance or disaster policies such as flood or earthquake insurance.
How insurance companies use your credit (WA State Insurance Commissioner)
Allstate Credit Scoring FAQs
Photo Credit: JasonRogersFooDogGiraffeBee
My neighbor has a similar house and pays much less in flood insurance than I do – this is a common complaint that insurance agents hear. The truth is that all flood insurance rates are the same and are set by FEMA (Federal Emergency Management Agency). No matter who you buy your policy through, the rates are the same for each individual property. There are many factors that can make a big difference in your flood insurance premium, a qualified agent can help you determine if you are paying too much or walk you through ideas that may make a major difference in your rating factors:
Base Flood Elevation
The BFE is the elevation which the base flood is expected to reach. Depending on the slope and geography of where your dwelling is located a single foot of elevation change can be the difference between avoiding flood damage or thousands of dollars in repairs. If any portion of your property falls onto a Special Flood Hazard Area, you will be required to purchase flood insurance by your lender, even if you dwelling is located 30 feet above the lowest point on the property. If your dwelling sits at a high elevation on your property parcel it is possible you may qualify for a LOMA (Letter of Map Amendment) and be removed from the Flood Insurance requirement. Before you property can be qualify for a LOMA certificate you will need to complete a Base Elevation Certificate (BSE) conducted by a licensed land surveyor who is qualified for BSE.
Large water flows have enough hydrostatic pressure to remove a house from its foundation. One factor in determining a flood insurance rate are flood vents. Flood vents allow quickly moving water to pass under an elevated structure, such as a house on an elevated crawl space, reducing hydrostatic pressure and the risk of removing a house from the foundation. To meet flood insurance guidelines, there must be at least two flood vents per wall, no more than one foot above grade level. There should be one square inch of flood vent for every square foot of enclosed wall.
How old is your house? Pre-FIRM and Post-FIRM Flood Maps.
What matters here, is whether you are on a pre-FIRM flood map or a post-FIRM flood map? Typically, Pre-FIRM buildings can be insured using "subsidized" rates, however if you hare on a pre-FIRM map and your Base Flood Elevation qualifies for a post-FIRM rating you could save money.
Want to know more about your flood rating? Give us a call at 877-220-5505
Photo Credit: The Ritters
Two depressions have been found on the Howard Hanson Dam that increase the risk of serious flooding along the Green River through Kent, Auburn, Tukwila, and Seattle. Col Anthony Wright, from The Army Corps of Engineer was interviewd in this video and warned residents that "If we have a big enough storm, we will release water from the resevoir, which will exceed the capacity of that levee system".
It is important to know that there is a 30 day waiting period between the day you buy optional Flood Insurance and the day it goes into effect. If you wait to buy flood coverage until Steve Pool, Jeff Renner, or Rebecca Stevenson are talking about a Pineapple Express storm moving toward Seattle this fall it will be too late. If you live in low lying areas of Kent, Auburn, Tukwila, or Seattle near the Green or Duwamish waterways it would be prudent to look into flood insurance before fall storm systems begin.
A few quick reminders about flood insurance:
- Almost all Homeowners policies exclude damage from surface water flooding
- A single inch of standing water in a home can result in thousands of dollars of damage
- There is a 30 day waiting period for Flood Insurance coverage to go into effect
Get more information on Flood Insurance, call 877-220-5505
The US Geological survey has reported two recent earthquakes near Bellevue, Washington. The first earthquake was recorded at 05:49am on Sunday, May 10, 2009. The second earthquake was recorded at 10:27:32 PM on Thursday, May 07, 2009.
Most Home Insurance policies provide protection against earthquakes, so contact Cascadia Agency for more information regarding Earthquake Insurance.
Paine Field General Aviation Day
Come see the latest in general aviation aircraft as well as many of the airplanes owned and operated by local private pilots at Paine Field in Everett. The morning kicks off with a Paine Field Firefighters’ pancake breakfast at 9:00 am. Cost is a donation to benefit NW Burn Foundation.
Antique aircraft and warbirds will be on display thanks to the participation of the the Museum of Flight, the Flying Heritage Collection, Cascade Warbirds and Historic Flight at Kilo-6. Among these will be WWII aircraft and many pre-war military and civil antiques.Along with these fascinating and historic aircraft, the Tyee Triumph Clubwill display some of their classic sports cars. Some of Paine Field’s fire engines will also be on hand for kids to get an up close look.The Blackjack Squadron will be participating with formation flyovers.
Taste of Mukilteo
The Taste of Mukilteo opens at 11:30 am. Great tastes will be available from Ivar's, Bank of Washington, Harbour Pointe Retirement Center, and Mukilteo Garlic Jim's, among others. All proceeds from the Taste of Mukilteo go to the Mukilteo Chamber of Commerce Scholarship Fund.
Free Flights for Kids 8-17
Starting at 10:00 am the EAA Young Eagles will offer free flights for kids ages 8 – 17 over Snohomish County. The Young Eagle Program provides future pilots the chance to experience flight in an exciting and safe environment under the care of experienced pilots. Last year, more than 200 children were treated to a free and unforgettable flight.