What Is a Home Insurance Score?

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What Is a Home Insurance Score?

Here at Credit Karma, we're constantly preaching the importance of your credit score. We might sound like a bit of a broken record by now, but we're back again to highlight another important effect of credit health.

Home insurance companies are interested in your credit history. They're so interested that specific scoring models have been developed to create credit-based home insurance scores. These scores use the correlation between credit information and insurance losses to predict how likely you are to file an insurance claim that could result in losses.

Not Too Different from Your Credit Score

Home insurance scores have some basic similarities with your credit score, as well as important differences.

What's the Same

  • It's a score. Like any of your credit scores, your home insurance score is determined by assigning negative and positive values of varying weight to information on your credit report. Those values are then put through a complex algorithm to establish a single score.
  • It's only part of the process. Similar to applying for credit, your score isn't the only thing insurance companies may look at when deciding whether to approve you and how much to charge. The difference here is that instead of considering your income and assets, a home insurance company is more likely to consider things like how far your home is from the nearest fire station, whether it's alarmed and your prior claim history.

What's Different

  • Who's calculating? Your home insurance score can be calculated by one of the three major credit bureaus, by another company's proprietary scoring model, or it could be calculated by the insurance company directly, using their own data and scoring models.
  • What are they looking for? Whereas your credit score is used to predict the likelihood that you will pay back borrowed money, your home insurance score is used to predict your insurance risk, or the likelihood that you will file a claim in the future that results in losses to the insurance company. Consequently, your home insurance score weighs your information differently than a traditional credit score might.

What Makes a Good Home Insurance Score

Like other credit scores, the complexity of factors and calculations involved in generating the score makes it impossible to determine exactly what will raise or lower your home insurance score. Based on studies that have been done on credit information and insurance losses, here are a few aspects of your credit history that insurance models might incorporate into your score:

  • Age of Oldest Account. Generally, the longer your oldest account has been open, the higher your credit-based insurance score. Unlike average age of accounts, this factor is based only on your oldest open account. It typically considers all lines of credit, including mortgages and installment loans.
  • Derogatory Marks. Derogatory marks cover a variety of negative information on your credit report. Like many of the following factors, derogatory marks are considered a sign of weak risk-assessment skills, so they will likely count against your home insurance score.
  • Account Status. Each account on your credit report has a status that lists whether the account in question is being paid on-time and in full. If you're late on payments, that fact can be noted in 30 day increments. Your account status may also specify if an account has been subject to collection, foreclosure or repossession. The more accounts listed in negative status, the greater insurance risk you may be assumed to represent and the lower your home insurance score is likely to be.
  • Amount Past Due. This is the total dollar amount of debt that you are late on paying back. Your total amount past due is related to account status, but may be considered separately because even one account being only 30 days late could represent a large insurance risk if the balance is exceptionally high.
  • Hard Inquiries. Hard inquiries are made when you apply for a new line of credit, as well as under some other circumstances. The more hard inquiries you have, the greater insurance risk you are likely to represent.
  • Credit Card Utilization. Your utilization is the total amount of outstanding debt on your credit cards divided by your total credit card limits. Generally, models predict that individuals with high credit card utilization are a greater insurance risk.
  • Total Credit Card Limits. This is the total dollar amount of all the limits on all of your credit cards. Higher total credit limits are likely to represent a lower insurance risk.

Generally, these factors are slightly different than the traditional credit score metrics. Still, they typically reflect the same kind of responsible borrowing habits that lead to a healthy credit history.

Why are they used?

Home insurance scores are meant to calculate potential for risky behavior in an insurance context. However, by measuring the amount and degree of risky behavior consumers engage in with their credit, insurers can predict how likely they are to engage in risky behavior that could lead to a costly insurance claim. This reasoning has been supported by a strong correlation between certain credit behaviors and insurance losses. Like everyone who reviews your credit information, home insurance companies want to see a history that reflects stable and responsible decision making.

If you're worried about your home insurance score, the good news is that maintaining your general credit health is a great place to start. If you're reading this article, you've probably already been keeping an eye on your credit, so keep it up. As any repeat reader of our articles has found out by now, responsible credit management can work to your benefit in more ways than just one.

About the Author: has been a Member Support Specialist at Credit Karma since December 2013. She can usually be found riding bikes around town late at night, communing with animals and eating sweets.

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All Comments

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1 Contribution
136 People Helped

Helpful to 136 out of 141 people

Clearly the "proprietary algorithm" being used is skewed so that, on a 990 scale, anything below 80% is rated "poor" or "very poor" risk.  Despite what CKCharmaine has written in her article, there is next to no correlation with credit scores.  I recently financed a new car and suddenly my home insurance risk plummeted 46 points into the Very Poor category from the previous Fair category and I have a good credit rating (732), am 68, have never had a claim against my home insurance and have been a home owner for more than forty years.  If this "score" really does impact what State Farm uses to determine how much I pay for home insurance it would seem to me to be grounds for a class action law suit.  However, there is no transparency in this regard and my local agent claims to know nothing at all about how this "insurance score" affects rates.  Similar discrepancies reported here by others would suggest we need greater consumer protection from our representatives in Washington.  In the home insurance "risk" category, the deck is apparently truly stacked against us.

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2 Contributions
66 People Helped
Helpful to 64 out of 68 people

I agree completely!  I have a 754 "Excellent" credit score, have never filed a claim on my house or car, and yet my auto and house insurance scores are"POOR" and show me as a risk.  Therefore, I am sure I am paying more for premiums if these scores are added into the premium equation.  I also believe that a good ol class action should be brought against any and all companies using these scores for premium payments!

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1 Contribution
20 People Helped
Helpful to 20 out of 68 people

I'm an insurance agent licensed in 47 states for a fortune 100 company. It's partly true that your credit is factored into your insurance score but so are many other things: Your education, marital status, location, vehicle, etc. I'm sure just like any other red blooded American you can attempt to sue for whatever you don't think is fair but here's the rub...there's no law that says an insurance company HAS TO provide you insurance. If you don't like the rates you're given, do some research. The grass may be greener on the other side. Or, instead of complaining about it on this forum, call your agent and ask them to rerate your policy. It'll take about as long as it took you to write a complaint that isn't going to solve anything.

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8 Contributions
50 People Helped
Helpful to 7 out of 9 people

I agree with this poster. There is no reason for risk rating to go up for someone with out any claims. I have heard the same thing from a lot of people home owners for more than 20 years, no claims, over 40 and we keep hearing something about our "risk factor".  You are right Misty they don't have to insure anyone how much money could they make then?

I have seen my premium more than double in less than 10 years. I honestly believe it has more to do with our  insurance commissioner putting the interest of the insurance companies over consumers. 

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1 Contribution
7 People Helped
Helpful to 7 out of 8 people

Hello NewOrchard, I'm not familiar with your situation at State Farm, but i had a claim against Travelers and over about 5 years my insurance doubled. I decided it was time to look around so I called my car insurer and they bundled my home and vehicles together, not only did my my vehicles went up about 10% but my house ins went down OVER 55%. The home and cars were with different company. The home was Amerprise and bundled w/Progressive. All together it was a good bit cheaper than before. I think the secret (if you want to call it that) is check priceses about about every other year. They just sneak them up on you.

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2 Contributions
1 Person Helped

How right you are except for the part about our "representatives" in Washington. They are out for them selves not us!!!

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1 Contribution
0 People Helped

I agree 100% there is no rhyme or reason to there score

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1 Contribution
0 People Helped

It's bull****. 

We have no choice and no control. 

Whether we own or rent we are going to have to pay so they can charge us whatever they want. 

and sorry to curse all up on your thread, but it is the most accurate way to express my feelings about this SO CALLED insurance score. 

I have ecellent credit and have only made one very small claim on my home (regretably) as a result of a windstorm that took some awnings down.  Ive lived in my home for 16 years I pay everyone on time all the time and have an 864 insurance score, which sounds good, but isn't according to Credit Karma and the author of this article.

Apparently the point of the article is to inform us that we are being mugged by the insurance industry and we just need to accept it.

5 Contributions
55 People Helped

Helpful to 47 out of 50 people

That makes perfect sense to me. What doesn't make sense is that all of my credit scores on CK are in the "excellent" range or on the high end of the "good" or B range. That is, all except for my home insurance score, which is in the "very poor" range. I could understand a little variance, but how can there be that much variance? 

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4 Contributions
34 People Helped
Helpful to 28 out of 29 people

Hi pkoutoul!  I am experiencing the same dilemma as you.  My credit scores are in the 700's and in the A/B range.  My credit card utilization is 19%.  However, my home insurance score is very poor.  This makes no sense to me at all. 

Hopefully someone from CK will explaain why this is. 

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5 Contributions
41 People Helped
Helpful to 38 out of 40 people

Agreed !  An explanation would be helpful.  My credit scores had been just about 800 a few months back with a home insurance score rating of 'good'.  I opened a couple of new accounts (I new what the impact would be).  My credit scores have dropped (780 for TransUnion which is still excellent and 953 for Vantage - still an A.  My Auto Ins score dropped from 942 to 845, still considered Very Good.  However, Home Insurance score goes from 881 to 791, Good to Poor !!  That doesn't make any sense especially since the Auto score is also supposed to reflect the likelihood of filing a claim.  

1 Contribution
25 People Helped

Helpful to 25 out of 26 people

All my scores are high except for the home insurance, something stinks. Sure does sound like a scam. 

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1 Contribution
12 People Helped
Helpful to 12 out of 14 people

As I am reading all the comments concerning Home Insurance score it looks as if most of us are "in the same boat".  All of my other credit scores are in the excellent range and my home score is poor....and we have always been timely with mortgage payments.  We have refinanced a couple of times over a period of 10-12 years but I can't see why that is a credit buster.  It would be interesting to hear how this score is really figured.  Also, is there anything as a homeowner one can do to improve this score like there is with the credit score?

1 Contribution
31 People Helped

Helpful to 31 out of 41 people

Home insurance and auto insurance scores are a giant SCAM. They just allow the insurance companies to make more money for nothing. There is no correlation between credit scores and insurance risk. Insurance is unlawfully forced on people by the illegitimate government, so they know you are at their mercy. Almost everyone has a poor insurance rating. It keeps profits high. 

I love how they pretend that credit algorithms are just too complex to understand, so there is no use worrying about them. If they're so complex, how is it a human being was able to come up with the algorithm? They might as well come out and say it. If you knew how bogus their algorithms were, for all kinds of credit, these people would swing from trees all over the land. 

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1 Contribution
7 People Helped
Helpful to 4 out of 17 people

Until the day something happens to your home, god forbid...then you'll be glad that nasty, nasty government "forced" you to have insurance.

1 Contribution
15 People Helped

Helpful to 15 out of 15 people

Something is seriously wrong with both the Auto Insurance and Home Insurance logs.  How can I have A credit rating with a credit score in excess of 750, a 'Vantadge' score of 990, less than 5% credit card usage and only a fair rating for Auto and Poor rating for Home Insurance scores.  Either the logrithms are badly messed up or the scores are truly irrelevant???

OBTW, NO auto claims in 9 years and one roof replaced here in Texas???

Something smells really bad here!

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1 Contribution
5 People Helped
Helpful to 5 out of 6 people

Insurance scores are completely unrealistic.

1 Contribution
22 People Helped

Helpful to 22 out of 24 people

Never had a Home Ins claim,and paid my  annual home ins premium in fvull when due.Yet I'm in very poor range.Well so much for alogorithms,or funny math.. Myself,I can't even predict if  or when I will submit a claim,God forbid,but ,some back office clerk using this system  can shine a negative light on me?Go figure

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1 Contribution
18 People Helped
Helpful to 18 out of 19 people

I am experiencing the same dilemma.  Vantage is 990, auto insurance score good, credit is only rated good and home insurance is poor all due to my refinancing at a better rate (hard credit inquiry)- whilst closing previous mortgage account.  My Refi  interest is 1 3/8 lower, payment is $200 a month lower, so doing the right thing has lowered home insurance score, REDICULOUS!

1 Contribution
20 People Helped

Helpful to 20 out of 21 people

The figures given by the 'proprietary algorithm' simply don't make sense. I am rebuilding my credit and currently at TU of 661, Vantage 696, Experian 688, Quizzle 701.

My auto insurance score is good at 880 (just gone down from 900, when everything else is going up), and yet my home insurance continues to plummet and is currently a very poor at 697. It was 800 in Feb and yet is still going down, while everything else is in the ascendency. My premiums are all paid in advance and have made no claims in 10 years despite living in Fla. Whoever writes the algorithms or analyzes the 'results' needs to be fired. Judging by past comments, I am not alone in my exasperation at the total illogicality of this score. 

1 Contribution
18 People Helped

Helpful to 18 out of 19 people

So big biz wants the debt and credit cards to keep you floating and floundering and then you get the house you been juggling to get only to find out that all the credit crap you were doing to build your score works in oposition to getting decent he owners insurance and now you will be paying 400 a month in insurance :0  

This is a racket 

1 Contribution
12 People Helped

Helpful to 12 out of 12 people

im struglin to put my life back togather. trying to repair bad credit,I certently don't need some unrealistic scam making thing hadrer on my intentions. had renters insurance 30 years never had a claim. This is another insurance scam to drive up apr rates for the working class citizen.

1 Contribution
11 People Helped

Helpful to 11 out of 14 people

My creditkarma account  is listing home owners ins., supposedly being reported by TransUnion, however I do not nor have I ever owned a home or had home ins.. Futhermore I have acquired my TransUnion credit report and there is no record of home ins. anywhere on the report.

How do I get this taken off my report as it is oblivously fraudulent/incorrect information? 

Top Contributor

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512 Contributions
1056 People Helped
Helpful to 9 out of 18 people

Hi japchic9, credit reports don't display credit scores, so you won't see it there and you can't remove it from anywhere. You can have a home insurance score even if you don't have a home or insurance plan. It's only used by insurance companies to predict if you'll file a home insurance claim.

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