Homeowners insurance for people with bad credit

Why does having bad credit affect your home insurance cost?

Insurance companies largely base premiums on the risk that you’ll file a claim. If you’re more likely to file a claim statistically, which homeowners in lower credit tiers are, your premium will likely be higher to account for the added risk.

Mortgage companies commonly use credit history as a way to gauge risk, and insurance companies have taken a similar approach. Insurers use the information on your credit report to generate a credit-based insurance score. A credit-based insurance score isn’t exactly the same as your FICO score. While they look at many of the same factors, the two measure different things: your FICO score evaluates your ability to make payments on time, while an insurance-based credit score measures the risk that you’ll file a claim.

When an insurance company looks at your credit history, it conducts what’s called a “soft” credit check. Unlike a “hard” check, a soft check won’t have a material effect on your credit score. So, you won’t get dinged while shopping around and comparing home insurance quotes. 

How does credit affect your home insurance rates?

While there are many factors that affect your home insurance rate, credit history can greatly affect price. According to rates from Quadrant Information Services, average home insurance costs for homeowners with poor credit are 59 percent more than the national average for a policy with a $300K dwelling limit. On the flipside, homeowners with excellent credit pay an average of 11 percent less than the national average. 

The table below illustrates the average annual home insurance premium for each of the four credit rating tiers.

Best home insurance companies for bad credit

In most states, insurers will use your credit-based insurance score when determining your insurance premium. However, the role your credit plays in your eventual insurance costs varies from company to company. Because each insurer has its own algorithm for pricing, some assign a high weight to your credit history while others prioritize other rating factors more. This means some companies may offer more favorable rates to homeowners with bad credit than others.

However, it’s important to note that price shouldn’t be the end all be all when selecting a provider. In the table below, we’ve identified insurers that offer affordable rates along with impressive coverage options, useful digital tools and high third-party scores and ratings for customer satisfaction and financial strength. Based on our analysis, these are some of the best companies for homeowners insurance for bad credit and therefore may be worth getting a quote from.

Can you get cheap homeowners insurance with bad credit?

Even if you have bad credit, you may still be able to find cheap homeowners insurance. Here are some of the insurance companies offering the most affordable coverage to homeowners in lower credit tiers, keeping in mind that your exact rate will differ from average based on characteristics specific to you and your home. For this reason, it's helpful to shop around with several companies before deciding on one. Note that not all carriers are available in all states.

How to get cheaper homeowners insurance with bad credit

No matter the carrier you choose, the following shopping strategies may help to offset your credit history’s negative impact on your home insurance rates:

• Shop around and compare quotes: Not all home insurance companies attach the same weight to your credit history, or credit factors might be prohibited in the state you live in. And some companies may offer homeowners insurance that does not check credit, even if the state allows it. Make sure that you request quotes from several home insurance companies for the same coverage types and policy limits (or as close as possible) and consider other factors such as customer service, claims satisfaction and coverage options that are important to you before settling.
• Review available discounts: Many insurers offer potential discounts on premiums if you qualify. Common discount opportunities include bundling your home and auto insurance policies, installing safety devices like smoke alarms, fire extinguishers and security systems or installing smart home devices.
• Improve your credit: Because your credit history impacts your premiums in most cases, you might save money by improving your credit. Doing so isn’t a quick fix, but you will eventually enjoy lower rates than you’d otherwise pay.

Speaking with a licensed insurance agent can help you decide on the best overall strategy to save on your home insurance if you aren’t sure where to start.

How to improve your credit for better home insurance rates

While the process can be slow, you could improve your credit history by:

• Making payments on time: Your payment history is the most important factor in determining your credit score. One late payment can cause a big drop, so do your best to pay every bill by its due date. Set up autopay when possible.
• Utilizing less of your available credit: Maxing out your credit cards is bad for your credit. Aim to use no more than 30 percent of your available credit to keep your credit score as high as possible.
• Checking your report for errors: Credit bureaus aren’t perfect and may accidentally put inaccurate information in your report. Removing those errors could boost your score. By law, you can request three free credit reports each year, giving you a chance to monitor your credit for issues.
• Minimizing hard credit checks: Credit checks can either be hard checks or soft checks. Soft pulls happen when your credit is requested for an informational purpose, such as by a credit monitoring service or when you ask for an insurance quote. Hard checks typically happen when you apply for new loans or credit cards. Each hard credit check drops your score by a few points, so you may want to avoid applying for loans or credit too often.

Frequently asked questions

Methodology

Bankrate utilizes Quadrant Information Services to analyze March 2025 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on married male and female homeowners with a clean claim history, good credit and the following coverage limits:

• Coverage A, Dwelling: $300,000
• Coverage B, Other Structures: $30,000
• Coverage C, Personal Property: $150,000
• Coverage D, Loss of Use: $60,000
• Coverage E, Liability: $500,000
• Coverage F, Medical Payments: $1,000

The homeowners also have a $1,000 deductible, a $500 hail deductible and a 2 percent hurricane deductible (or the next closest deductible amounts that are available) where separate deductibles apply.

These are sample rates and should be used for comparative purposes only. Your quotes will differ.

Credit: Rates were calculated based on the following insurance credit tiers assigned to our homeowners: “poor, average, good (base) and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. The following states do not allow credit to be a factor in determining home insurance rates: California, Maryland, Massachusetts.

Bankrate Score

Our 2025 Bankrate Score considers variables our insurance editorial team determined impact policyholders’ experiences with an insurance company. These rating factors include a robust assessment of each company’s cost of coverage, product availability, financial strength ratings, online capabilities and customer and claims support accessibility. We grouped these factors into three essential categories — cost and ratings, coverage and savings, and support — which we then weighted in a tiered approach. 

Each category was assigned a metric to determine performance, and the weighted sum adds up to a company’s total Bankrate Score — out of 5 points. Our scoring model provides a comprehensive view, indicating when companies excel across several key areas and highlighting where they fall short.

• Tier 1 (Cost & ratings): To determine how well auto and home insurance companies satisfy these priorities, our team analyzed average quoted premiums from Quadrant Information Services (if available), as well as any of the latest third-party agency ratings from J.D. Power, AM Best, Demotech and the National Association of Insurance Commissioners (NAIC).
• Tier 2 (Coverage & savings): We assessed companies’ coverage options and availability to help policyholders find a provider that balances cost with coverage. Additionally, we evaluated each company’s discount options listed on its website.
• Tier 3 (Support): To encompass the many ways a home insurance company can support policyholders, we analyzed avenues of customer accessibility along with community support. This analysis incorporated additional financial strength ratings from S&P and Moody’s and factored in a company’s corporate sustainability efforts.

Tier scores are unweighted to show the company's true score in each category out of a possible five points.