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Post Bankruptcy Auto Insurance

In today's economy, millions of people across the country are experiencing financial difficulties they have never been through before. Unemployment rates are high, and those who are fortunate enough to have jobs are working for less money in many cases. The rate of personal bankruptcies has risen dramatically in response to this changing economic reality. The impact of personal bankruptcy on auto insurance is one area of concern consumers need to be aware of as they navigate through the bankruptcy process.

Bankruptcy Affects Car Coverage Costs

Many car insurance consumers understandably wonder whether filing for bankruptcy will prevent them from being able to obtain auto insurance coverage at all. This question makes great logical sense. After all, it has been well-noted that an individual's credit score is one major factor in play when auto insurance providers work to calculate policy premiums. Certain credit considerations must be met in order for drivers to qualify for a preferred or even standard auto insurance policy, for example.

Your personal credit rating is an important factor in determining what you will pay for auto insurance, and even your eligibility for certain types of coverage. In many cases, individuals who file for bankruptcy will experience an increase in their auto insurance premiums. They may even find that they are having a hard time getting into a policy at all. If this describes you, there are always options. In many cases, you can get a policy from a non standard auto insurance carrier. Non standard auto coverage is simply insurance protection for drivers who, for one reason or another, do not qualify for standard coverage. Bankruptcy and its resulting effect on your insurance scoring certainly qualify as some of these potential reasons for the need of a non standard auto insurance policy.

However, it must also be noted that in certain limited cases, filing for bankruptcy can actually improve your chances of getting into an auto policy. Not all auto insurance companies use credit scoring in the same way. Some of them rely more on your driving record to determine your rates. However, there are many companies that regard credit history as a main determining factor when they set down to calculate premiums and determine whether individual drivers will qualify for certain modes of coverage. In some cases, if your credit history has long been checkered and your score has been low for years, filing for bankruptcy can actually improve your auto insurance outlook, at least with certain providers. That's because bankruptcy in some ways wipes your credit slate clean (although it is certainly not a free pass some suppose it to be).

Credit One Factor among Many

But an honest discussion of this issue cannot be complete without an acknowledgement that your credit history is only one of many factors that auto insurance providers take into account in putting together your policy premiums. Once again, this provides some degree of hope for those of us who, for one reason or another, have found it necessary or are at least considering the possibility of filing bankruptcy. Just because your credit rating is not impeccable, does not mean you are uninsurable. In fact, it is highly advisable that you consult with at least a few of your home state's auto insurance carriers prior to making the decision to file for bankruptcy. Each company deals with this sort of situation differently, and it will be greatly beneficial to you to get a peek at the potential ramifications of filing as they pertain to your future ability to purchase affordable auto insurance coverage.

As noted previously, your credit score is an important factor when it comes to your auto insurance profile, but it is far from the only factor in play. For example, you may be an excellent driver who has long demonstrated a consistent record of safety on the road. If you have a clean driving record spread out over a period of many years, your insurance provider will be much more likely to overlook your credit troubles at least to the extent that they will still be willing to provide you with coverage even after your bankruptcy filing.

However, if you have a spotty driving record filled with accidents and citations, you already represent a high risk to the provider. Adding a personal bankruptcy filing may make you uninsurable under that provider's standard insurance programs. Under this or other related circumstances, you might be relegated to an assigned risk pool or other variety of non standard auto coverage until the effects of the bankruptcy are not as pronounced on your credit score.

Of course, other factors are widely used in the computation of auto insurance premiums, and in the determination of eligibility for coverage. Things like the vehicle you are attempting to insure; the mileage you claim; the physical location of your dwelling and other factors also weigh in on the process. Do not lose heart by an impending bankruptcy, and be sure to remain focused on the task of trying to save as much money as possible on your coverage. After all, an emphasis on budgetary restraints will be necessary if you hope to rebuild your financial foundation in the months and years following a personal bankruptcy filing.

Shop Around to Save Money

Keeping in line with this goal of saving money means you have a responsibility to do everything you can to hold down the cost of auto insurance coverage to the greatest extent possible. To accomplish this goal, you must be proactive in your pursuit of a policy that suits you in terms of dollars and cents. Do not be relegated to accept the terms of your current provider's modified policy premiums. Recognize that there are many qualified auto insurance providers, and that many of them are dedicated to helping customers who do not fall into the preferred policy category.

The market for non standard auto insurance has grown in recent years, partially owing to the great expansion of the online portion of the market. With so many more options for non standard coverage, your chances of having to accept an assigned risk pool policy or other similar mode of coverage are greatly diminished. In many cases, your best bet for finding affordable coverage is to align yourself with one of these non standard auto insurance specialists. They quite often have greater flexibility to offer coverage choices to drivers who do not fit the mold of standard carriers, and therefore they have a greater chance of both being able to get you into a policy, and of being able to save you the most money on your auto insurance premium. But with all this being said, do not assume that this is your only option. Check into all available modes of coverage and find out for sure.

Probably the biggest key for individuals who have been forced to consider filing personal bankruptcy is to make choices based on what works best for them economically. This principle is as true in the area of auto insurance as it is in the greater personal economic picture each of us must consider. Make your post bankruptcy auto insurance choices based on maximum savings.



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