A conviction for driving under the influence does not directly affect your homeowner insurance rates, but it can indirectly impact them. A DUI can cause significant financial difficulties, which in turn can harm your credit standing. A decrease in your credit score can indicate more risk to the insurer and cause an increase in your homeowner policy rate.
Costs of a DUI
When you get a DUI your reputation takes a hit, and so does your wallet. The financial consequences may include legal fees, bail, license reinstatement fees, monitoring devices, fines and the cost of alcohol evaluations. Your car and life insurance rates may be raised, and your employment status may be placed at risk. While all these variables do not necessarily cause your homeowners insurance to increase, they can damage your credit -- and a poor credit history can drive your homeowner rates up.
Felony or Misdemeanor?
Generally, if you are suspected of driving under the influence but no one has been injured and no property has been damaged, you will be charged with a misdemeanor. If you injure someone else, cause an accident or break other laws, you typically are charged with a felony offense. You can also be charged with a felony after a third or fourth offense even if you do not damage property or harm others. Some insurers won't provide homeowners policies to convicted felons. Instead, you will need to contact your state's department of insurance to find a specialty insurer to underwrite the policy.
Risk and Rates
Insurance companies create a risk profile when they underwrite your homeowner policy. They review factors such as the age of your home, the type of construction, the location, your claims history, additional risks on your property -- such as a swimming pool -- and your credit report when calculating the cost of your premium. If the underwriters observe instability in your credit history, they may classify you as a higher risk than someone with a stable credit history, causing you to pay more for your homeowner insurance. While issuers of homeowner policies do not normally do a criminal background check, they do have the right to cancel or refuse to renew your policy based on a conviction for criminal activity that increases their risk of insuring your home.
Most insurers renew homeowners policies yearly. If your credit declines during that time, there is a chance that your premium will go up. A slight decrease in your credit profile may only raise your rate a little, but if your DUI conviction causes you to lose a job, spend time in jail or miss multiple payments, this can have a significant impact on your homeowner rate, especially if you have to declare bankruptcy.
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