How to Get Cheap Insurance for Your Home Business (Even with Bad Credit)

You just started your home business and need homeowners insurance. There’s only one problem: You have bad credit. How can you possibly get cheap insurance for your business? Don’t worry. There are several ways you can still get homeowners insurance without stressing about your bad credit.

Let’s look at some simple methods that can help you get cheap homeowners insurance even with bad credit. We’ll also look at ways to improve your credit score so that getting insurance can be an easy process in the future.

Homeowners insurance, by definition, is insurance that covers the interior and exterior of your home. For many entrepreneurs, their headquarters is their home. It won’t protect your technology or cover company car accidents, but it’s a good policy to have regardless. 

How to Get Cheaper Homeowners Insurance

Generally, with a bad credit score, insurance rates are a bit high. Providers are reluctant to give good rates to people with a poor score because they see them as unreliable with their payments. 

The best ways to find cheaper rates are comparing insurance companies and their homeowners insurance policies, bundling homeowners and auto insurance, increasing your deductible, being ready for disasters, and making sure you have the right coverage.

Below, we will go into detail about each way that has been listed. These are surefire ways to lower your insurance costs.

Compare Insurance Companies and Their Policies

There are many insurance comparison sites to choose from that can help you decide which company will give you the cheapest rate. Each company has a different policy, so make sure to do some research. To stay organized with your comparisons, use an Excel spreadsheet to gauge which insurance company would be right for you. 

You can even go on each company’s website and get a free initial quote. That might give you a better idea of what to expect if you decide to go with that particular company. 

Bundle Homeowners and Auto Insurance

Bundling homeowners and auto insurance is a great way to save money. Doing so from the same provider can save you a lot in the long run. You save roughly 16% on premiums when you bundle. That might not seem like much initially, but the savings add over time. Just give your insurance provider a call and ask about the bundling process. They will handle the rest.

Increase Your Deductible

Increasing your deductible for homeowners insurance can significantly lower your premium, which, in turn, saves you money. The higher the deductible, the lower the premium. The opposite is true as well. Call your insurance provider or go online to see how you can increase your deductible and lower your premium. 

Be Disaster Ready and Tighten Security

Being prepared for whatever may happen to your house can reduce your monthly payments on homeowners insurance. Whether it’s a natural disaster or man-made damage to your home, being ready for a calamity helps lower your rates. Natural disasters can include flooding, fires, or tornadoes. Man-made damage can involve break-ins or vandalism. 

Home security cameras and alarms are great ways to protect your property from thieves and burglars. You can find home security systems at stores or online.

Have the Right Amount of Coverage

It’s hard to determine what the right amount of coverage is. Minimally, homeowners insurance policies offer $100,000 in liability. Experts strongly suggest that homeowners get up to $500,000 in liability to be on the safe side. Having the right amount of coverage helps keep premiums low and affordable. 

A good rule of thumb for homeowners insurance is to get coverage that amounts to roughly 80% of your home’s value. For example, if your home costs $350,000, then 80% of that would be $280,000. 

Ways to Improve Your Credit Score

Yes, trying to increase your credit score is an uphill battle, but your score can be excellent with a bit of patience and perseverance. Below are some ways to boost your credit score. 

Pay Your Bills On Time

Paying your bills on time may seem simple, but it’s not as easy as it looks. Life happens, and sometimes you don’t always have enough money to pay your bills on time. That’s okay, but don’t make that a habit. 

Use an online document or spreadsheet to help you with budgeting. It’s an essential skill to learn. There are even apps you can use to help with your business finances.

Reduce Any Debt You Might Have

Outstanding debt that ends up in collections puts a damper on your credit score. Consider paying it off as soon as possible. It might be inconvenient at the moment, but it will benefit your wallet and your credit score in the long term. Don’t wait for your debt to go into collections either.

Don’t Add on Extra Debt

It may be tempting to open a new credit card account, especially as the pandemic wears on, but you may not want to do that. More debt could potentially mean a lower credit score. Your score automatically lowers when the credit card company takes an in-depth look at it as well. Opening a credit card account is not worth losing some points.

Keep Your Old Credit Accounts Open

Having proof that you can pay off your debts improves your credit score tremendously. Keep old accounts open and watch your score increase without even moving a muscle. It may take some time, but you will see results ultimately. Insurance providers look for people with good credit to insure and to give discounts to, so it’s beneficial to keep your old accounts open.

Homeowners Insurance With Bad Credit Is Possible

Getting homeowners insurance with bad credit is possible. It requires more work, but it’s doable. If you follow the suggestions above, you will see your rates go down. Also, do your best to improve your credit score. You’ll find that your insurance rates will decrease significantly. You can put back money into your savings or you could even raise your deductible again.

Whatever you decide to do with your extra savings, make sure you upkeep your credit score and immediately pay off any debts.