Credit based insurance

[SuzieQ]

A little background first. After much prayer and searching My family, My 75 year old mother, my 3 year old daughter and myself were able to obtain our dream of our own home last year.I did a lot of careful searching and was sure to get a loan that had a fixed rate so I wouldn't have any surprises. I shopped for houses to not spend more than I could afford. I cut expenses to the bone to make sure that we would be secure through what would promise to be a difficult time in the houseing market and I wanted to be able to ride it through. I am not rich by any means, I usually have nothing at the end of the week, but I have met my bills. On occasion I have to put back the big pack or toliet paper in order to be able to also get the laundry detergent but we make it.My problems began, apparently, three months after taking possession of our home built in 1935. Though the house itself had just been replumbed, the main water line from the meter to the house was old if not the original. It broke one Saturday morning flooding our basement. Being stupid I contacted my insurance company on what to do. I though you buy insurance, they are experienced, they are the experts, they know what to do.My flood, which American Family Insurance did decide to help with after my deductible turned out to be minor. After $1,000 out of pocket for the deductible, and another $750 for the water line repair. The insurance issued a check for $1012 towards the restoration of the carpets.Fast forward to last Thursday, I received a letter from my insurance carrier stating that due to my claim they were able to now use the credit based risk analysis on my renewal. Because I had a recent increase in debts,( I bought a house) and a collection (caused when the insurance company didn't pay a medical bill after a car wreck four years ago) my credit score indicated that I could face financial troubles they are now going to double my homeowner's insurance. As an added bonus to this since I have my cars with the same company/agent, they are doubling their rates as well. With them using their credit based model to assess me my house payment will go up $100 per month, and my car insurance will increase by $86 per month. The homeowner's insurance is paid through escrow.I contacted my state insurance commissioner and was told in a nutshell, "too bad, you should take better care of your credit and never file a homeowner's claim under $20,000." "American Family is within their rights to raise my rates and there is nothing their office could do."Now before I ask for advice, I want to ask others. Does it really make sense, or is it more preditory of the insurance company to say "I see you are having difficulties--here let me charge you more so you are sure to fail."I have been shopping insurance for the last week, but most all carriers not only use this practice, but are going to charge even more becasue I am not established with their company. Does anyone have any suggestions?I know I can reduce coverage, but this leaves me more exposed if I have a loss. I was told to increase my deductibles, but the $1,000 was hard to manage when I had to do that, if I had a big loss and a larger deductible I could be homeless. If I have to pay these higher rates I could be homeless as well. Does anyone know of any relief?

[lisare]

This was a good information that you put up here...dude…..hope that it benefits all the ones who land up here.