New York Times Investigation Spotlights Credit Scores as “Hidden Factor” in Home Insurance Costs
FOR IMMEDIATE RELEASE
March 10, 2026
Contact: contact@insurancefairnessproject.com
New York Times Investigation Spotlights Credit Scores as “Hidden Factor” in Home Insurance Cost
Credit Scores Play Bigger Role than Climate Risk or Geography, Report Finds… Homeowners With Lowest Scores Paid Hundreds More
Yesterday, the New York Times published a new investigation spotlighting the “hidden role” of personal credit scores in the country’s ongoing home insurance crisis. Astoundingly, the Times reported that credit scores play a bigger role in setting rates than disaster risk in the states that allow insurers to use credit scores in their pricing formulas.
The New York Times: The Hidden Factor Behind Your Home Insurance Cost: Your Credit History
Key excerpts:
While those with poor credit histories often can’t purchase homes at all, people with “fair” scores, which range from around 580 to 669, are paying twice as much in some places as people with “excellent” scores of about 800 or higher.
That can mean owners of nearly identical homes … pay wildly different rates to insure them. For most people, it’s now just as expensive to have a credit score of “fair” as it is to live in an area likely to experience a disaster like a hurricane or wildfire.
About 29 percent of consumers have credit scores that are categorized as “fair” or “poor.”
For those with both weaker credit and high disaster risk, the combination can set them up for a downward spiral: disasters tend to be followed by decreases in credit scores as people use credit cards and bank loans to recover. That can lead to higher insurance rates, pushing monthly housing costs further out of reach.
A working paper released today by the National Bureau of Economic Research found that homeowners with the lowest credit scores paid, on average, $550 more in 2024 for home insurance than those with the highest scores.
In Texas, the advocacy group Texas Appleseed found that some insurers charge people with poor credit up to 12 times as much as people with excellent credit for certain policies.
“Using credit scores to set insurance premiums effectively punishes people for financial hardship that has nothing to do with their home or their exposure to disaster risks,” said TJ Helmstetter, spokesperson for the Insurance Fairness Project. “As climate-driven disasters push insurance costs higher across the country, policymakers should be eliminating unfair and discriminatory pricing practices, not allowing them to make coverage even more unaffordable.”
Only a handful of states, including California, Massachusetts, and Washington, have banned insurers from using credit scores, citing disproportionate impact on low-income people and people of color. Research from Americans for Financial Reform backs up those concerns.
"The use of credit scores to decide how much someone pays for their home insurance is an extension of the long history of racial discrimination by the insurance industry that continues to this day," said Annie Norman, Associate Director for Campaigns at Americans for Financial Reform Education Fund. "This arbitrary and predatory practice can and should be curbed by public officials like insurance commissioners or state legislators."
The Times cited data from the National Bureau of Economic Research and Quadrant Information Services in its reporting. The same data was used in a report produced jointly by the Consumer Federation of America (CFA) and the Climate and Community Institute (CCI), which corroborates the Times’s findings.
“The insurance industry is gaslighting us when they say they price homeowners insurance policies to reflect climate risk,” said Moira Birss, Senior Fellow with the Climate and Community Institute. “Climate change is driving dramatic changes that demand an honest assessment of risk and housing, but instead of proactively helping to reduce the risks the insurance companies are penalizing poverty.”
The CFA-CCI report found that homeowners with low credit scores pay an average of $1,996 more per year, about 99% higher premiums, than homeowners with high credit scores for the same coverage.
The Equitable and Just Insurance Initiative has recently published its Insurance Rate Setting and Recommendations, which encourages states to ban the use of credit scores to set premiums.
###
The Insurance Fairness Project is an information hub dedicated to offering insights into the home insurance crisis, exploring its drivers and highlighting solutions alongside issue experts and community advocates.
