Do Home Insurers Really Need to Check Credit?: Mark Gongloff

Pop-quiz time: Which of the following events do you think would make your home-insurance premiums rise?

1. You buy a 100-year-old mansion on the beach.
2. Natural disasters boost insurance claims.
3. Lumber, sheetrock and contractors get more expensive.
4. You’re late on some credit-card payments.

The correct answer is, believe it or not, “all of the above.”

The standard explanation for why insurance costs have soared in the US is that a heating climate is growing more dangerous, driving up disaster claims and reconstruction prices. And that’s all true. But there’s another key factor that gets much less press and has zero to ...