Science
How Rising Home Insurance Costs Are Linked to Credit Scores
Two friends bought nearly identical homes last year, in the same northern Minnesota neighborhood, for the same price.
But Tara Novak pays more than twice as much for home insurance as Petra Rodriguez. The only difference? Ms. Novak has a lower credit score.
Across the country, people with weaker credit histories are paying far more for home insurance than owners with spotless records.
Where the home insurance rate gap between “fair” and “excellent” credit is higher
Home insurance premiums have risen rapidly in recent years, fueled by climate change, building costs and inflation. The price shock has rippled into the real estate market, dragging down home prices in areas vulnerable to disasters and leading insurers to abandon homeowners in risky places.
But these dynamics obscure another problem: The home insurance market has cleaved in two along a boundary defined more by a customer’s personal history than by the risk of a disaster hitting their home.
Americans with weaker credit histories, usually from missed payments or high amounts of debt, now pay significantly more for insurance, regardless of where they live, two new studies have found. 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. And the gap is growing.
Insurers use a metric based on credit history known as an insurance score to set rates, and the figure tracks closely with a customer’s credit score.
The penalty for having a “fair” credit history versus an “excellent” one
States with the biggest pricing gaps
That can mean owners of identical homes, like Ms. Novak and Ms. Rodriguez, 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.”
“There’s so many reasons people have bad credit,” Ms. Novak said. “It’s not like I’ve ever not paid a bill on time. I’m a stickler on my bills, I’m a stickler on my rent, never been late. This is not fair.”
“The choice to use credit scores in pricing means that those lower-credit home owners in risky areas are effectively subsidizing more affluent high-credit homeowners who also live in risky areas,” said Nick Graetz, assistant professor of sociology at the University for Minnesota, who wrote one of the recent papers. “So in a lot of ways, you can keep your insurance price down if you’re high income, high credit — even if you live on the coast of Florida.”
A handful of states have banned insurers from using credit data because of concerns about fairness and the potential for discrimination against low-income people and people of color, but the majority allow it.
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.
“When a disaster hits, there’s a loss of income that occurs, and then that can impact someone’s credit score because they can’t pay their debt, they can’t pay their rent, they can’t pay their mortgage,” said Lance Triggs, executive vice president at Operation HOPE, a financial literacy nonprofit. “And now they’re faced with higher insurance premiums post-disaster.”
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.
The findings broadly track with data from Quadrant Information Services analyzed by The New York Times, which found that, on average, lower credit scores meant higher premiums across every state that allowed the practice. Dr. Graetz used the same data set for his research, which he did in collaboration with the Consumer Federation of America and the Climate and Community Institute.
When a windstorm last year hit the home of Audrey Thayer, a city council member in Bemidji, Minn., it ripped the siding off her house and stripped shingles from her roof.
Ms. Thayer’s insurance did not cover all the damage. As she fought her insurer for more money, she opened new credit cards and bank loans to repair her home. Her credit score dropped as she tried to find a new insurance plan.
Ms. Thayer, a member of the White Earth Nation, said she was not aware that her credit score could affect her home insurance rates, even though she teaches about credit ratings at a nearby tribal college. “Most of the folks here do not have good credit,” said Ms. Thayer, whose community is one of the poorest in the state. “I did not know what a credit score was until I was 35 or so.”
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, said Ann Baddour, the director of the nonprofit’s Fair Financial Services Project.
Higher costs have serious implications for low-income homeowners who live in the path of hurricanes, said Nadia Erosa, the operations manager at Come Dream Come Build, a nonprofit community housing development organization. After the Brownsville, Texas, region saw intense flooding last spring, some residents turned to companies offering high-interest loans to fund repairs, she said, raising the risk of the disaster-credit spiral.
“Delinquencies are going up because people cannot afford their payment,” she said.
The price of risk
Before they can get a mortgage, homebuyers are usually required by lenders to purchase home insurance.
“Households with insurance have fewer financial burdens, fewer unmet needs, they recover faster, they’re more likely to rebuild,” said Carolyn Kousky, an economist and founder of Insurance for Good, a nonprofit that focuses on finding new approaches to risk management. “Yet the people who need insurance the most are the least able to afford it.”
Insurance companies consider a variety of factors when setting the premium for a property. They might examine the age of the roof, or the area’s vulnerability to hurricanes or wildfires. They factor in how much it would cost to rebuild the house if it were damaged.
Insurers have argued that credit history is also worth considering because people with low scores tend to file more claims than those with excellent scores, an assertion that is backed up by the working paper published in the National Bureau of Economic Research today. This likely happens because people with weaker credit histories tend to have less income, and when their home is damaged, they file insurance claims for smaller fixes that a wealthier homeowner might pay for out of pocket.
Paul Tetrault, senior director at the American Property Casualty Insurance Association, a trade organization, said credit scores are a valid way to price premiums.
But others argue that using credit information to price insurance doesn’t make sense.
Because a homeowner pays for insurance upfront, “it’s not like you’re really extending a loan to the customer where you would be worried about the risk of repayment,” Ms. Kousky said. She points out that insurance companies can opt not to renew a homeowner’s policy if they believe it is too risky — a tactic they have been using with increasing frequency.
The NBER analysis found that homeowners who want to pay less for insurance should pay off debt to raise their credit score rather than replace roofs and make other improvements to avoid damage when disaster strikes.
Others believe that even if credit scores are accurate predictors of future claims, they shouldn’t be used to set premiums because that can perpetuate or worsen disparities. For example, people in their mid-20s who are Black, low-income, or grow up in impoverished regions have significantly lower credit scores than their peers, a July working paper from Opportunity Insights, a not-for-profit organization at Harvard University, found.
“When the government and the financial system mandate that we buy a product, there’s a special obligation to make sure the pricing is fair,” said Doug Heller, director of insurance at the Consumer Federation. “To me that is an absolutely solid reason, just like we don’t allow pricing based on race or income or ethnicity or religion.”
A natural experiment
A handful of states, including California and Massachusetts, have banned or limited the use of credit scores in setting home insurance premiums, despite opposition from the insurance industry.
In Nevada, where a temporary pandemic-related rule prevented insurers from using credit history to increase premiums for existing customers from 2020 to 2024, companies refunded approximately $27 million to nearly 200,000 policyholders, said Drew Pearson, a spokesman for the Nevada Division of Insurance.
Perhaps the clearest example of the effects of these bans comes from Washington State, which banned the use of credit information in setting home insurance premiums starting in June 2021. The rule immediately faced legal challenges, and was in effect for just a few months until it was overturned in court.
But the episode allowed researchers to evaluate the effect of credit factors on insurance premiums. When the rule took effect, people with the lowest credit scores saw a decrease in premiums of about $175 annually while those with the highest scores saw an increase of about $100, the NBER analysis found.
“We could see the dynamics of insurance pricing for the same households over time,” said Benjamin Keys, a professor at the University of Pennsylvania’s Wharton School, who co-authored the paper.
What homeowners paid before and after a ban on credit-based pricing in Washington State
Values compared with premiums paid by homeowners with “medium” credit scores (717 to 756)
In Minnesota, where Tara Novak, Petra Rodriguez and Audrey Thayer live, a state task force looked at ways to lower insurance costs for residents. It recently considered a ban or limit on the use of credit scores to set rates, but did not move forward with a recommendation.
Ms. Rodriguez said she doesn’t think it’s fair that her friend Ms. Novak should have to pay so much more for insurance to live in an identical house.
A credit score doesn’t capture anything about a person’s habits, or what they’re like as a tenant, or even years of on-time rent payments, she said. “It’s not who you are,” she said.
Methodology
Home insurance policy rates were supplied by Quadrant Information Services, an insurance data solutions company. The rates shown are representative of publicly sourced filings and should not be interpreted as bindable quotes. Actual individual premiums may vary.
‘States with the biggest pricing gaps’Rates shown are based on a home insurance policy with $400,000 of dwelling coverage and a $100,000 liability limit on a new home, for a homeowner age 50 or younger. Rates are averaged for all the individual company filings represented in the sample, which add up to a majority of the market share in each state but do not cover all active insurers in the state. Rates are also averaged to the state level from zip code level data.
‘The credit penalty in each state’Each insurance company incorporates credit history information differently, often using proprietary methods, so the scores do not map directly to FICO credit scores.
‘What homeowners paid before and after a ban on credit-based pricing in Washington State’Data shown are based on observations of real home insurance policies and homeowner credit scores from ICE McDash analyzed by the researchers of Blonz, Hossain, Keys, Mulder and Weill (2026). The price comparisons across credit score tiers controlled for variance in disaster risk, insurance policy characteristics, geography, and other year to year fluctuations.
Science
Nobel Prize winner leaving UC Berkeley for new role in China
Nobel Prize recipient Omar Yaghi is leaving his role at UC Berkeley to lead the development of a new artificial intelligence institute at Tsinghua University in Beijing, the Chinese university announced.
Yaghi will head the AI Chemistry and Materials Research Institute at Tsinghua, where he was appointed an honorary professor in 2022. Known as AIMATRY (AI × Materials × Chemistry), the new center will focus on material design and synthesis through artificial intelligence, according to a statement from the university.
In 2025, Yaghi shared the Nobel Prize in chemistry with Susumu Kitagawa of Kyoto University and Richard Robson of the University of Melbourne for their development of metal-organic frameworks, a type of super-porous material in which metal ions and carbon-based molecules combine to form crystals with exceptionally large surface areas.
The material has the potential to combat climate change by capturing and storing carbon or other pollutants, and by extracting water from the atmosphere in water-scarce areas. Upon awarding the prize, a member of the Nobel committee likened the technology’s ability to store enormous amounts of stuff in seemingly compact spaces to Hermione Granger’s enchanted handbag in the Harry Potter series.
Yaghi’s Irvine-based company, Atoco, has said it will start taking orders later this year for its technology that harvests water from the air.
A representative for Yaghi said he was not yet available to respond to questions.
China is one of several countries that has been actively recruiting scientists from the U.S., where the Trump administration has slashed science funding, suspended research grants, fired science advisors and tightened immigration restrictions.
“For many, many years, our funding was very competitive; if you worked hard and you were doing good research, you would get funding,” Yaghi said of the U.S. in an interview with Scientific American earlier this year. “The current state is not so encouraging because of the cutting back on grants and support of science by the very agencies that many university researchers rely on.”
Yaghi was born in Jordan to Palestinian refugees, and immigrated to the U.S. when he was 15 to study.
“We’ve learned over and over in human civilization that scholars can move across borders,” Yaghi told the New York Times last year. “This is how knowledge spread and how vast regions of the world lifted themselves out of poverty.”
Science
Trump administration seeks to limit federal funding that doesn’t ‘advance’ presidential policies
A new rule proposed by the White House Office of Management and Budget would fundamentally overhaul the way federal grants are awarded and overseen — a sweeping change that one scientific society said “would all but end the use of scientific merit in the selection of grants and programs across the government.”
Proposed in late May, the rule would give political appointees unprecedented control over federal grants for research, education and infrastructure, and specifies that government funds can only be spent on projects “aligned with administration policies and priorities,” according to a copy of the proposed rule.
The rule would also restrict research topics, limit U.S. scientists’ ability to collaborate with colleagues in other countries and make it easier for the government to suspend or cancel grants at any time.
The changes are intended to improve “transparency, accountability, and oversight for Federal awards” while “ensuring that American tax dollars are not wasted or misused,” according to the White House office.
But critics say that if the rule is implemented, the final sign-off for grants will no longer be in the hands of subject-matter experts within individual agencies, but in those of political appointees.
“This touches all parts of American life,” said Dr. Eric Rafla-Yuan, a psychiatrist who practices at the Veterans Administration and San Diego County’s psychiatric hospital.
“Control of how all of the federal grants and programs are funded will fall under a small group of highly partisan individuals who would have very few limits on how they spend these billions of taxpayer dollars,” said Rafla-Yuan, who also chairs the Committee to Protect Public Mental Health advocacy group. “This touches everyone’s life, even if they don’t realize it.”
OMB published the proposed rule May 29, opening a 45-day comment period that closes July 13.
Opposition to the proposed rule has mobilized multiple sectors of society. Professional groups representing cancer researchers, civil engineers, county governments, medical schools, housing agencies, city and municipal governments, nonprofits and others have publicly expressed concerns about potential consequences.
By midday Thursday, the Federal Register logged nearly 100,000 comments about the proposal, many of them expressing concern.
“I understand the need for oversight, fiscal responsibility, and accountability. That is not the issue,” wrote Jack Feldman, a neuroscientist who holds the David Geffen School of Medicine Chair in Neuroscience at UCLA. “The issue is whether scientific research is to be judged by scientific merit, or whether it can be approved, denied, or terminated according to broad political criteria that may change from one administration to the next.”
Crucially, the rule converts policies governing federal grants from “guidance” into binding regulations that all agencies would be required to follow. It would give political appointees power to override federal agencies’ merit-based reviews and mandate that a political appointee review decisions to ensure that all awards “demonstrably advance the President’s policy priorities.”
The elevation of political appointees in what were previously merit-based decisions has alarmed many scientists.
“The proposed rule changes would all but end the use of scientific merit in the selection of grants and programs across the government,” read a statement from the Planetary Society, a nonprofit dedicated to space research.
Researchers and science groups have also expressed concern about a section of the rule prohibiting the promotion of “theories of disparate-impact liability” — a legal concept that refers to policies that appear neutral but cause disproportionate harm to certain groups.
The section’s vague language and many loopholes could have a chilling effect on any research that studies the effects of a disease, policy or public health intervention on any specific group of people, Rafla-Yuan said.
As an example, he said, “if there’s a specific age range that is at higher risk for suicide, and we want to figure out, well, what’s going on with people that are aged 14 to 19 … we can’t do that under the wording in this rule.”
New restrictions on collaborations with scientists in other countries would hinder opportunities for U.S. researchers and limit innovation, said Joanne Padrón Carney, chief government relations officer for the American Assn. for the Advancement of Science.
“Science is a global enterprise. Especially in biomedical and public health fields, diseases don’t care about borders or government policies,” she said.
California’s congressional delegation sent a letter Wednesday asking OMB to rescind the proposal, outlining concerns about its impact on scientific innovation, U.S. competitiveness and the fiscal stability of local governments, many of which rely on federal grants for local services.
The proposed rule grants the federal government broad powers to suspend or cancel grants for any reason, introducing “unprecedented unpredictability into local governance,” the lawmakers wrote, “leaving vital infrastructure projects unfinished and abandoning vulnerable populations who rely on these services.”
Republican Sen. Susan Collins has also asked the White House to withdraw certain parts of the letter and extend the public comment period, saying the proposed rule as written would “harm small and rural communities, undermine scientific and biomedical research, and conflict with Congress’ control over the federal funding process.”
Science
Diarrhea-causing cyclosporiasis exceeds 1,000 cases in U.S. What Californians should know
Several states, primarily in the Midwest and on the East Coast, have reported thousands of cases of cyclosporiasis, a parasitic disease that can cause an extended bout of debilitating diarrhea.
There have been cases of cyclosporiasis infection in California this year, but none has been linked to the current outbreak. Public health officials, however, have advice for residents to stave off illness.
Cyclosporiasis is an intestinal illness caused by several species of the microscopic parasite Cyclospora cayetanensis and is spread through the feces from an infected person that has contaminated food or water, according to the federal Centers for Disease Control and Prevention.
People become infected with the illness by consuming food or water that has been contaminated with the parasite — the infection is not transmitted from person to person.
The epicenter of the current outbreak is in Michigan, which has reported more than 1,000 cases since June, including 44 people who were hospitalized. The state typically reports about 50 cases of cyclosporiasis annually. Now there may be hundreds more infected as 17 states have reported numerous cases.
Officials say the true number of infected people is likely higher because some people recover without medical care and are not tested for the parasite.
In the United States, food-borne outbreaks of cyclosporiasis have been linked to various types of fresh produce imported from Latin America, including raspberries, cilantro, basil, snow peas and mixed salad, according to the California Department of Public Health.
Officials say those who have fallen ill became sick after eating food in the United States and did not report travel during the 14 days before they got sick.
Those who have contracted cyclosporiasis have ranged in age from 5 to 86.
There is currently no evidence of a single, multi-state cyclospora outbreak, meaning there isn’t a common source linking all cases, according to the CDC and the U.S. Food and Drug Administration, which are working with local public health authorities to investigate the cases in each state.
At this time, there aren’t any local outbreaks in California, and current cases of cyclosporiasis infection are not linked to the multi-state outbreak, according to the California Department of Public Health.
“From January to June 2026, California has reported 41 provisional cases of cyclosporiasis, compared to 80 cases during the same period in 2025,” said Beth Deines, information officer for the state agency.
Most of these cases are associated with recent international travel, she said.
“With the significant increase in cases in the Eastern and Midwestern states, we will monitor for cases that may be associated with travel to areas of the country that are experiencing these increases,” Deines said.
Similarly, officials with the public health department will look for clusters of cases that may indicate transmission occurring in California.
There have been four domestic cases reported since May 1.
Two of those who were infected reported that they had traveled to the Midwest. Investigation of these cases is ongoing. To protect patient privacy, the state public health department does not disclose where in the state the patients reside.
Symptoms of cyclosporiasis
Cyclosporiasis cases are reported year-round; however, infections are most common when temperatures are warmer, in the summer and early fall.
Infected people experience symptoms from two days to two weeks after consuming food or drinking water containing the parasite.
Some people who are infected, particularly those from areas where cyclosporiasis is endemic, may not have any symptoms.
Those who do develop symptoms could experience:
- Watery diarrhea
- Loss of appetite
- Weight loss
- Cramping
- Bloating
- Increased gas
- Nausea
- Fatigue
Less common symptoms may include:
- Vomiting
- Body aches
- Headache
- Low-grade fever
- Other flu-like symptoms
Cyclospriasis can be treated with a combination of antibiotics. Without treatment, symptoms can last from a few days to a month or longer.
Some symptoms, such as diarrhea, may go away and then return.
How to protect yourself
When traveling to areas where cyclospriasis is endemic — including tropical or subtropical regions — avoid drinking tap water. Also make sure hot food is served piping hot, health officials say, and cold food should be kept thoroughly chilled. Germs that cause food poisoning can grow quickly in lukewarm food.
A complete list of food and drink considerations provided by the CDC can be found here.
Most food-borne outbreaks of cyclosporiasis in the U.S. have been linked to various types of imported fresh produce, so public health officials in California and in states reporting infection cases recommend:
- Wash your hands with soap and water before and after handling or preparing raw fruits and vegetables. Note that hand sanitizer does not kill the parasite that causes cyclosporiasis.
- Wash all fruits and vegetables thoroughly under running water before eating, cutting or cooking.
- Scrub firm fruits and vegetables, such as melons and cucumbers, with a clean produce brush.
- Cut away any damaged or bruised areas on fruits and vegetables before preparing and eating.
- Refrigerate cut, peeled or cooked fruits and vegetables as soon as possible.
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