Landlord insurance and your credit
July 28th, 2006 by KenricI went to change insurance companies for one of my rentals today. When they ran my credit, my rate went from $610 to $900! According to the insurance companies, I came in the middle rating for risk which caused my premium to jump so much.
The insurance companies use your credit report to evaluate their risk, but the problem is that they don’t use your FICO score! The reason I was in the middle rating was because of the number of credit inquiries in the past 12-36 months. Of course, being a real estate investor I was well above the norm in credit inquiries and open accounts.
The best rating, or “A” rating was to have 0-6 inquiries in the past 24 months, 0-5 new accounts in the past 36 months, etc…. there was no way that I would ever get this “A” rating. What sucks is that they don’t distinguish among accounts (credit cards vs HELOCs vs mortgages). My FICOs are in the mid-700’s (just checked today to be sure there was nothing fishy going on) and according to the insurance company I have to pay a higher premium due to my credit risk!!! I’m in the same risk group as someone with a few accounts or mortgages and has missed some payments! WTF?
I need to find a company that doesn’t use this standard. BTW, this was with Farmer’s Insurance.
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Posted in Finances | 
Stumble it!
I heard that this was coming. Insurance companies were going to start using people’s “credit history” as another indicator of risk. This includes home insurance, car insurance, health insurance.
By Clifford on Jul 28, 2006
I hear you. Everytime my premium is due on my rentals, I take a jar of Vaseline with me to the agent’s office. :-(
By Steve on Jul 28, 2006