How to Navigate Renters Insurance When You Have Bad Credit

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Bad credit can happen to anyone for a variety of reasons, and many people with less than optimal credit scores worry they’ll have difficulty finding apartment insurance. If you’re part of the nearly one-third of Americans with a credit score of 600 or below, you’re likely concerned about your ability to get coverage.

While your credit score will always have an effect on the price of a policy, there are still low cost renters insurance plans available that can give you the coverage you need at a price within your budget. There are other ways to balance out the impact of your poor credit score and find the plan that’s right for you.

Does Bad Credit Make Insurance More Expensive?

Insurance policies are written and quoted by taking a wide variety of factors into account. While credit is likely going to be among those, that doesn’t mean it will have a significant influence on your premiums. There are many other criteria used to help determine cost, like safety features of the residence.

Underwriters typically focus on unique factors when creating a policy, which means that bad credit doesn’t have to stop insurance from being affordable. No matter what your credit score is, you’ll be able to find an underwriter to rate a policy that’s within your budget and has the right coverage.

What’s the Relationship Between Credit and Insurance?

Many assume that insurance companies are concerned by the possibility of people with bad credit not paying their bills on time, but this isn’t necessarily the case. The truth is that there may be a relationship between certain issues in a person’s credit history and their likelihood of filing a claim.

Therefore, your FICO credit score is probably substantially less important than you think in terms of its effect on your credit score. Insurance companies use their own proprietary formulas to focus on the individual aspects of your credit history that are relevant to them. Having a low credit score doesn’t necessarily mean they’ll view your credit history unfavorably.

How Much More Expensive Is Insurance with Bad Credit?

While renters insurance is incredibly valuable, under one-half of renters are covered. Many are likely unaware of the fact that apartment insurance is extremely affordable for most budgets. In fact, the average plan costs just $144 per year, or $12 a month. That’s a small price to pay for extensive coverage.

Even in the unlikely event that your credit history does lead to significantly higher premiums on your renters insurance, the truth is that it will most likely still be worth the cost. In a worst-case scenario, your coverage could make a substantial difference in your long-term financial health.

Renters insurance is an affordable way to keep your personal belongings safe in a variety of circumstances, and it can keep you on your feet if something goes wrong. Even those with bad credit can find low-cost renters insurance options that still provide the peace of mind that comes from knowing you’re covered.