Having good credit is essential for buying a Central Ohio home for several reasons. You already know that good credit helps you obtain the best mortgage interest rates and terms. What you may not realize, is that good credit saves you money on your homeowner’s insurance, too!
Insurance companies verify your credit score as a way to measure their risk. Studies show that homeowners with mid-range scores could pay 32% more for home insurance than those who have excellent credit.
It may not sound fair, but it’s true – and perfectly legal in Ohio. The insurance industry uses credit scores as loss projectors, and overall it has proven accurate. Statistically, homeowners who have lower credit scores file claims more frequently. The pattern suggests that homeowners with lower credit scores may find it difficult to afford home maintenance and repairs. In turn, neglected homes have a higher risk of experiencing damage.
Here are some other considerations used by homeowner’s insurance companies:
- Type of home construction. Brick is considered a lower risk than wood-frame homes.
- Age of the home. Newer homes are generally considered a lower risk.
- Distance from the home to the nearest fire hydrant and fire department.
- The total amount of coverage.
- The amount of your deductible.
- Discounts for multiple policies with the same carrier, such as auto, home and life insurance.
Insurance companies also look at the past history of insurance claims on the property. This means that if an insurance claim was filed on a home before you took ownership of it, your premiums could be affected by this past claim. You can verify this by accessing your C.L.U.E. report.
C.L.U.E. stands for Comprehensive Loss Underwriting Exchange, which is a large database of personal info and insurance claims on private property. C.L.U.E. reports are only available to consumers for the home that they own and live in. You can obtain the request form for your C.L.U.E. report online, but you must mail it in to receive your data.
To bottom-line it, your credit score is a big part of how your homeowner’s insurance premium is calculated. The better your credit, the lower your premiums could be. It’s also a good idea to understand how homeowner’s insurance works. You can learn more by reading this Consumer Guide to Homeowner’s Insurance.
We hope this information is helpful to you! As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.
Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!
Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!
Andrew Show
Broker, CEBA, CEBA-M, CNE, CSP, ABR-M, e-PRO, GREEN
Buyer’s Resource Realty Services
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax
