If you documented a homeowner’s insurance claim and feel your insurer should pay more than…
Insurance companies can include your credit score as a factor in calculating the insurance score they use in determining what you pay.
It’s been a big complaint for years among consumers who learn their auto insurance rates are affected by their credit rating.
But insurance companies also factor in your credit history when they set premiums for your homeowners insurance.
Cliff Magnussen takes great care of his Tacoma home, and says he’s had the same insurance company for 20 years without a claim. He says he also maintains good credit.But he says his annual premium just went up nearly $300 a year because he bought a heat pump.
“I noticed it was about $200 higher than it was before,” said Magnussen about the renewal statement he recently received.
The new annual premium is actually $273 more. He called his insurance company to ask why.
“They say TransUnion picked up the thing that i had applied for a credit card,” he said.
It’s not really a ‘credit’ card. Magnussen opened an in-store, revolving credit account- to buy the heat pump a heat pump. It was financed through a credit union.
“The heat pump was about $4,100,” Magnussen said.
The store gave him a paper card with his store account information.
Magnussen says according to his insurance company, the new revolving credit account lowered his overall credit score.
That, in turn, helped lower the score his insurance company used to reset his premiums.
Insurance companies routinely include your credit history as one factor in determining how much you pay.
“I think it’s ridiculous,” he said.
What really steams him, is he only purchased the heat pump on credit- to take advantage of a 1- year interest- free financing promotion.
“I’ll just pay so much a month for 12 months – and that’ll pay the whole thing off,” Magnussen said.
Now, the money Magnussen thought he’d save using an interest-free loan, is wiped out by higher premiums to insure his home.
While the $273 increase comes to less than $23 more a month, Magnussen still filed a complaint with the Washington State Insurance Commissioner.
He also shopped around with other insurance companies to see if he could get a better deal and discovered that even with the increase his current insurance company offers the best rate.