Your Credit Score and Home Insurance

Many of the Billyard Insurance Group insurance partners will use credit score, where permitted by provincial regulations, as a rating factor to determine home insurance premiums. The value of using credit score has been demonstrated as a useful and accurate predictor for future home insurance claims. In fact, most major property insurers in Canada have been using credit score for years.

Credit score reflects a client’s level of responsibility and behaviour when it comes to managing their finances. Analysis shows a direct link between a person’s credit score and the frequency and severity of claims. By adopting this factor, we are able to more accurately rate individual clients by customizing rates and charging an appropriate premium for the risk. Clients with good credit scores will benefit by receiving the most competitive premium. The good news is that most Canadians have a “fair” to “good” credit score.

How does credit score impact my premium?

The factors used to determine the premium a client pays for their home insurance are specific to individual coverage needs. The premium amount is directly related to a number of rating factors, including:

• The age, size and features of your home
• The materials used to build your home
• The estimated cost of reconstruction
• Where your home is located
• Your property claims history
• Whether your neighbourhood is prone to sewer backup
• The crime rate in your neighbourhood
• The value of your personal belongings
• How close you live to a fire station and fire hydrant
• How your home is heated
• Your credit score
• The type of coverage and deductible you choose
• Any applicable discounts

Will a credit inquiry affect my credit score?

No. The presence of a “soft” credit inquiry will not impact your credit score. A common misconception is that every inquiry decreases your credit score by a certain number of points. This is not true. While all inquiries are recorded on your personal credit report, a credit score inquiry for insurance purposes will not impact your credit score.

Does the use of a credit score constitute a discriminatory practice?

No. We value integrity, accountability and transparency. We have conducted our own analysis and found no discriminatory links. Credit score is only a reflection of the person’s level of responsibility to meet their financial obligations. We are confident that using credit score is both a scientifically valid and ethical practice.