Declaring bankruptcy is a difficult decision, but sometimes unavoidable despite the consequences it will have on our lives. Auto and home insurance are among the aspects affected by this decision. This can lead to financial difficulties, but there are solutions to help you with your insurance.
At Assurances Multi-Risques, we are here to inform you about the consequences of bankruptcy on your insurance policies, without judgment. Rest assured, we want to equip you with the knowledge you need to understand the reasons for refusal and enable you to better insure yourself after bankruptcy.
Reasons for refusing insurance in the event of bankruptcy
Insurance companies establish their acceptance criteria based on risk and past experience. In the eyes of many insurers, an individual experiencing financial difficulties represents a higher probability of having to pay out.
There are several reasons why insurers may refuse to cover someone who has declared bankruptcy. This may seem unfair to you, but this decision is based on the insurers’ risk assessment. As an independent insurance broker, our goal is to help you understand these risks.
A person who is bankrupt will generally have less money to maintain their car or home. They are therefore more likely to have to make a claim with their insurer if a problem arises in the future.
We recommend reading an article explaining why auto and home insurers check your credit score.
In short, for an insurer, debt and credit ratings increase risk, which explains why coverage is denied. Even if a person who is bankrupt has never made a claim in the past, they may still be denied insurance.
How to get insurance after bankruptcy?
It is important to inform your insurer if you declare bankruptcy or have previously declared bankruptcy. This may affect your insurance coverage. This will help you avoid insurance issues and invalid claims.
Our best advice is to be transparent. It is important to be honest with your insurer. Even if it may seem less advantageous in the short term, you will benefit in the long term in the event of a claim. Make a sincere declaration to your insurer for your car and your home, you won’t regret it.
If you are having difficulty obtaining insurance due to your financial situation, we strongly advise you to contact an independent insurance broker. This broker will be able to assist you and provide valuable advice.
In addition, we recommend avoiding high-interest auto loans, which can sometimes be tempting. This could be detrimental to both your auto insurance premium and your personal finances. For more information, we recommend reading our article on second and third chance credit.
Choosing an independent insurance broker
We are aware of the difficulties that financial bankruptcy can cause. We understand the challenges of having to start over from scratch with your suppliers, including your insurance company.
Take advantage of this experience to grow and consult with professionals, such as an independent insurance broker. If you encounter insurance issues, we can facilitate the process and help you find an insurer who will agree to cover you.