Your credit-based insurance score can influence what you pay for homeowners insurance in many states. It isn’t the same as your traditional credit score, but it’s built from parts of your credit history to help insurers predict the likelihood of future claims. Understanding how this works—and what you can do about it—can lower your costs without sacrificing coverage. Quick Takeaways In most states, insurers may use a credit-based insurance score alongside other factors to set your premium; some states ban or limit this practice. Insurance credit checks are typically soft inquiries and don’t affect your credit score. If your credit information leads to an adverse action (e.g., higher premium, denial), you must receive a notice with the key reasons and who supplied the data—so you can correct errors. What Is a Credit-Based Insurance Score (CBIS)? A CBIS uses elements of your credit report (payment history, amounts owed, length of history, new credit, and credit mix) to estimate future insurance losses. It is not your FICO®/VantageScore®, and it cannot use personal traits like race, income, age, or marital status. Typical weights (example from FICO used by NAIC): Payment history (~40%) Outstanding debt (~30%) Length of credit history (~15%) New credit (~10%) Credit mix (~5%) Excluded: race, gender, income, employment, residence location, interest rates, and certain inquiry types. How Insurers Use Credit—And Where They Can’t Insurers generally use CBIS in underwriting (eligibility) and rating (price), combined with other factors like location, construction, claims history, and safety features. States commonly forbid using credit as the sole reason to raise rates, cancel, or deny coverage. State rules vary: some states ban or limit credit in homeowners pricing (e.g., California, Maryland, Massachusetts), while others impose narrower restrictions (e.g., limits on using lack of credit history). Always check your state DOI. Will Getting Quotes Hurt My Credit? No. Insurance quote checks are usually soft inquiries, which appear on your report but do not impact your credit scores. (Hard inquiries—like applying for a loan—can affect scores temporarily.) If Your Credit Hurts Your Rate: Your Rights If an insurer takes an adverse action based in whole or part on your credit (such as charging more, reducing coverage, or denying a policy), federal law requires a notice that includes: The specific reasons for the action or key factors affecting your score The name and contact of the credit bureau that supplied the report Your right to obtain a free copy to review and dispute inaccuracies Keep the notice; correcting errors can lower future premiums. OCINC DOI 7 Practical Ways to Improve Your Premium (Credit & Non-Credit) Pay on time, every time. Payment history is the biggest CBIS driver. Set autopay or reminders. Lower revolving balances. High utilization can depress your score; aim to keep balances well below limits. Limit new credit. Many new accounts in a short period can signal risk. Check reports annually & after adverse action. Use AnnualCreditReport.com to spot and dispute errors. Ask for a re-rating after “extraordinary life circumstances.” Many insurers will reconsider if you faced events like disaster, job loss, or serious illness. Strengthen non-credit factors: add monitored alarms, smoke detectors, water-leak sensors, and maintain the roof—common rating considerations that can earn discounts. FAQ Is credit the only thing that determines my rate? No. It’s one factor among many (home characteristics, claims history, local risk, selected coverages/deductibles). States often restrict how credit may be used. Can an insurer refuse to sell me a policy just because of my credit? Rules vary, but many states prohibit using credit as the sole reason to deny or cancel. Check your state DOI for specifics. Where is credit use banned or limited for homeowners? Policies and statutes change, but California, Maryland, and Massachusetts are frequently cited as limiting or banning credit use for homeowners pricing; others impose narrower restrictions. Verify current rules with your state DOI. Bottom Line In many states, your credit-based insurance score matters for homeowners premiums —but it’s not destiny. Keep reports clean, ask for re-rating after hardships, and optimize non-credit factors (security, roof, mitigation). And always compare quotes and consult your state insurance department if something seems off. With a little maintenance—on both your home and your credit—you can protect your property and your wallet. At Alcock Insurance, we are committed to offering our clients a wide range of comprehensive and affordable insurance policies. We go above and beyond to ensure that we meet your unique needs with tailored solutions. To find out more about how we can assist you, please reach out to our agency at (252) 353-1700 or CLICK HERE to request a free, no-obligation quote. Disclaimer: The content provided in this blog is for informational purposes only and should not be considered professional advice. For personalized guidance, it is important to consult with a qualified insurance agent or professional. They can offer expert advice tailored to your individual situation and help you make well-informed decisions about your insurance coverage.
Auto insurance isn’t one-size-fits-all. The right policy blends required protections (to satisfy state law and lenders) with optional coverages (to protect your car and your wallet). Use this guide to understand each coverage, how it works, and how to choose smart limits. The Core Coverages (Most Common) 1.Liability Insurance (Usually Required by Law) Bodily Injury (BI): Pays others’ medical bills, lost wages, and legal costs when you’re at fault. Property Damage (PD): Pays to repair others’ property (their car, a fence, a building). Limits: Often shown as per person / per accident / property (e.g., 100/300/100 = $100k BI per person, $300k BI per accident, $100k PD). Tip: State minimums are usually too low. Choose higher limits (and consider an umbrella policy) if you have savings, a home, or higher income. 2.Collision Pays to repair/replace your car after a crash with another vehicle or object, regardless of fault. You choose a deductible (the amount you pay first). Higher deductibles → lower premiums. 3.Comprehensive (“Other Than Collision”) Covers non-crash losses: theft, vandalism, hail, flood, fire, falling objects, glass, and animal impacts. Also subject to a deductible (you can often select a $0 glass deductible by endorsement). 4.Uninsured / Underinsured Motorist (UM/UIM) Protects you if you’re hit by a driver with no insurance (UM) or too little insurance (UIM). Can cover medical bills (and, in some states, property damage). Highly recommended. 5.Medical Payments (MedPay) / Personal Injury Protection (PIP) MedPay: Pays medical bills for you and passengers, regardless of fault. PIP: Broader than MedPay in “no-fault” states—may include medical bills, lost wages, and essential services. Valuable Optional Coverages (Often Overlooked) Gap Insurance: If your car is totaled and the loan/lease balance exceeds the car’s actual cash value (ACV), gap pays the difference. Essential for low down payments, long loans, or leases. Rental Reimbursement / Transportation Expense: Pays for a rental car or rideshare while your insured vehicle is being repaired after a covered loss. Roadside Assistance: Towing, jump starts, flat tires, lockouts, fuel delivery. OEM Parts / New Car Replacement (where available): Ensures original manufacturer parts or covers a brand-new replacement if your new car is totaled within a time/mileage window. Custom Equipment / Accessories: Covers aftermarket wheels, stereos, wraps—if you’ve added them, schedule them. Rideshare Endorsement: If you drive for Uber/Lyft, this fills gaps between your personal policy and the TNC policy. How Claims & Payouts Work (Fast Primer) Deductibles apply to collision and comprehensive: Insurer pays the covered amount minus your deductible. Actual Cash Value (ACV): Most auto policies pay the car’s market value at time of loss (depreciated), not what you paid new. Total Loss: If repair costs + salvage value exceed ACV threshold, insurer “totals” the car and pays ACV (gap can cover the loan shortfall). At-Fault vs. Not-At-Fault: With collision on your policy, you can fix your car now and let your insurer subrogate (collect from the other carrier) later. Picking Smart Limits (Simple Framework) 1.Start with liability: Aim for at least 100/300/100 (or higher) if you have assets or higher income. Add a $1–$2M umbrella if you want extra protection beyond auto/home liability. 2.Decide on collision & comprehensive: If your car is newer, valuable, or financed, keep both. Choose deductibles you could comfortably pay tomorrow (e.g., $500–$1,000). 3.Add UM/UIM to match liability limits: Too many drivers carry minimal insurance—protect yourself and your passengers. 4.Layer in helpful extras: Gap (loan/lease), rental, roadside, OEM parts, rideshare—as your situation requires. What Affects Your Premium (and How to Save) Vehicle factors : Value, repair costs, safety features, theft rates. Driver profile: Age, driving history, annual mileage, garaging ZIP. Coverage choices: Higher limits and extras cost more; higher deductibles reduce premium. Discounts to ask for: Bundle home/condo/renters with auto Telematics / safe-driver programs Good student, defensive driving course Multi-car, paid-in-full, paperless, vehicle safety features Quick Scenarios: Which Coverage Responds? You rear-end someone: Your liability (PD/BI) pays their damage/injuries; collision fixes your car. Hail dents your hood: Comprehensive. Hit-and-run damages your car: Collision (or UM property damage where available). Deer jumps into the road: Comprehensive (animal impact). Your parked car is sideswiped and the driver disappears: Collision. You’re hit by an uninsured driver and injured: UM/UIM (medical/lost wages per state rules). New car totaled, loan balance exceeds payout: Gap. Bottom Line Every driver needs strong liability and UM/UIM; most owners of newer or financed cars should also carry collision and comprehensive . Add targeted extras (gap, rental, roadside) to fit your budget and risk. With the right mix, you protect people, property, and your finances—and avoid surprises after a crash or catastrophe. At Alcock Insurance, we are committed to offering our clients a wide range of comprehensive and affordable insurance policies. We go above and beyond to ensure that we meet your unique needs with tailored solutions. To find out more about how we can assist you, please reach out to our agency at (252) 353-1700 or CLICK HERE to request a free, no-obligation quote. Disclaimer: The content provided in this blog is for informational purposes only and should not be considered professional advice. For personalized guidance, it is important to consult with a qualified insurance agent or professional. They can offer expert advice tailored to your individual situation and help you make well-informed decisions about your insurance coverage.
Welcome to our new insurance agency blog! This is our very first post. We're not quite sure what we're going to write about here, but the plan is to create helpful content for customers and prospective clients about information that is relevant to you. We hope you'll come to view this as a top resource for keeping your family and your finances safe. Here are a few of the topics we may be writing about: Answers to clients' frequently asked questions. Helpful information about insurance shopping. Safety and Health Tips and Ideas. Local Community Information. Stay Tuned!