Filing Bankruptcy May Improve Opportunity To Acquire Insurance Coverage
When shopping for auto insurance or homeowner’s insurance, you may have found there is a change in the method business is done. In many insurance companies, the use of credit history has become commonplace. However, with the slowing economy, increasing consumer debt and overwhelming number of individuals falling victim to home foreclosures and other mortgage related crises, there is concern that the use of credit history may adversely affect those seeking to purchase new insurance coverages.
So, what is the underlying basis for using credit history in the realm of insurance underwriting? In the scope of finance and insurance, it is the underwriting principle that those who carry high credit scores demonstrate financial responsibility and, therefore, demonstrate responsible behavior. This, while correct in a relatively normal economy, may not be the case in today’s economy with a potential recession on the horizon.
If you are purchasing insurance coverage, it is distinguished to question the underwriting principles of the insurance carrier that is considering coverage for you. If you gather the premium rates quotes are abnormally high for the coverages offered, this may be indicative of the impact your credit history may play on the underwriting process.
While there is much debate among consumer advocate groups, with regard to the use of credit history in the underwriting of insurance coverage, the fact remains, this is a common practice that is not changing in the near future. Therefore, if you are shopping for insurance protection, for your auto or you home, you may want to consider looking at your credit come by and three credit bureau reports. In working to improve your credit score you can, ultimately, improve your premium rates. Look for inaccuracies on your credit report, say charges where needed and, if necessary, judge filing for bankruptcy.
While bankruptcy may seem like the last alternative in your personal financial portfolio, filing for bankruptcy has many advantages: lowering your insurance premiums is just one of them. While it may take several months, or even years, to see the true benefits of bankruptcy, your insurance company deems this a “financially responsible” behavior and actually lowers your insurance premium when debt is essentially eliminated through a bankruptcy discharge.
Obtaining insurance protection was once considered a relatively simple process by which the insurance underwriting department would assess the risks based on your demographic, including gender, age, and marital spot. In unusual years, however, insurance companies are not only looking at your personal claims and driving history records, but also considering your credit score as part of that process. If you find your insurance premiums are quite high, due to unpleasant credit history, consider filing bankruptcy as an option to improve your credit earn and, ultimately, improve your insurance premium rates.
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Filed under Corporation Filing Bankruptcy by on Nov 3rd, 2011. 
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