Georgia 19th Worst State to Insure Homeowners with Poor Credit

According to a recent report from InsuranceQuotes.com, Georgia homeowners who have poor credit pay 134 percent higher homeowners insurance rates than people who have excellent credit. This places Georgia as the 19th state with the highest difference in the country. The national average is increased by more than 91 percent. 

What About Average Credit?
The homeowners who have fair credit paid 46 percent more for home insurance than what a Georgian with good credit would pay. This is the 17th greatest difference in the United States. The National Association of Insurance Commissioners has said that 85 percent of home insurance companies utilize credit-based insurance scores where it is allowed. 

InsuranceQuotes.com Acquires Data
InsuranceQuotes.com commissioned a Quadrant Information Service to help calculate the insurance rates for homes by using data from six major carriers who had approximately 60 percent of the market shares for Georgia. When the average was calculated, it was based on a 40-year-old single woman who owned a two-story single family home that was built in 1978. The insurance came with $100,000 liability coverage, $144,000 dwelling coverage and a $500 deductible. During the experiment, three tiers of homeowners insurance scores were analyzed: poor, fair and excellent. 

What to Understand
Insurance companies use credit scores to assess the risk of the person applying for insurance. Other factors that could determine price include geographic location, driving history, age and gender. People pay for insurance based on credit scores because studies have shown a positive correlation between insurance scores and a high loss ratio. Those with lower scores are more likely to file a loss claim. However, Georgia law prohibits the use of only credit information in determining a canceling or denial of coverage.

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Sources:
InsuranceQuotes.com
Atlanta Business Chronicle