How Bankruptcy Affects Your Car Insurance Rates

How bankruptcy affects car insurance rates is based on your credit score. Filing for bankruptcy will give you a bad credit score, which can raise your insurance rates. Not every insurance company checks your credit score when determining risk. If you’re worried how bankruptcy affects your auto insurance rates, enter your ZIP code below to find affordable coverage from local companies near you.

UPDATED: Dec 11, 2023

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance company and cannot guarantee quotes from any single insurance company.

Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

UPDATED: Dec 11, 2023Fact Checked

Free Auto Insurance Comparison

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Benjamin Carr

Former State Farm Insurance Agent

Benjamin Carr worked as a licensed insurance agent at State Farm and Tennant Special Risk. He sold various lines of coverage and informed his clients about their life, health, property/casualty insurance needs. Assessing risks and helping people find the best coverage to suit their needs is a passion of his. He appreciates that insurance was designed to protect people, particularly during times...

Former State Farm Insurance Agent

Schimri Yoyo

Licensed Agent & Financial Advisor

Schimri Yoyo is a financial advisor with active life and health insurance licenses in seven states and over 20 years of experience. During his career, he has held roles at Foresters Financial, Strayer University, Minnesota Life, Securian Financial Services, Delaware Valley Advisors, Bridgemark Wealth Management, and Fidelity.  Schimri is an educator eager to assist individuals and families in ...

Licensed Agent & Financial Advisor

UPDATED: Dec 11, 2023

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance company and cannot guarantee quotes from any single insurance company.

Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.

UPDATED: Dec 11, 2023

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance company and cannot guarantee quotes from any single insurance company.

Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

UPDATED: Dec 11, 2023Fact Checked

Are you struggling with the financial burden of bankruptcy and wondering how it impacts your car insurance rates? Look no further! We delve into the key factors that determine how bankruptcy affects your car insurance premiums. We explore the relationship between bankruptcy and insurance rates, examining the impact on your credit score, driving history, and insurance claims.

Additionally, we provide essential tips on how to mitigate the effects of bankruptcy on your car insurance costs. Don’t miss out on this valuable information! Enter your zip code now to compare rates from the best insurance providers and find the most affordable coverage for your unique circumstances.

Filing bankruptcy is going to give you a bad credit score and a higher car insurance rates.

You may not know it, but insurance, even car insurance, is a financial transaction. You are paying premiums on a policy, and in return for your payments, the insurance company is agreeing to stand behind your vehicle for the duration of the policy, regardless of what it ends up costing.

Because the insurance company has so much on the line, they look at your credit score to determine whether you are an insurable risk. Higher credit scores mean less of a financial risk, and lower scores mean paying higher premiums.

If you already have a car insurance policy in effect, your insurance company may not check your credit score until it is time to renew the policy. That means that your rates will not go up immediately after you file for bankruptcy, but the next time your policy is up for renewal it could. Even worse, if the bankruptcy pushed your credit score too low, you could be denied coverage or have your policy canceled at renewal time.

In the meantime, look for ways to keep the cost of auto insurance down. Many safety features built into cars will earn discounts, including such things as anti-lock brakes, electronic stability control, and anti-theft devices.

Additionally, if your car has air bags, you would be eligible for a discount based on those, and the discounts increase as these things are combined, saving you even more money overall.

You may not be able to completely erase the effects of a bankruptcy on your car insurance, but with some careful planning you should be able to prevent your premiums from rising beyond what you can afford to pay.

Frequently Asked Questions

How does filing for bankruptcy affect car insurance rates?

Filing for bankruptcy can negatively impact your credit score, which in turn can lead to higher car insurance rates. Insurance companies use your credit score to assess your financial stability and determine the risk of insuring you.

Will every insurance company check my credit score when determining my car insurance rates?

No, not every insurance company will check your credit score when determining your car insurance rates. However, many insurance companies do use credit scores as a factor in their underwriting process.

When will my insurance company check my credit score?

If you already have a car insurance policy in effect, your insurance company may not check your credit score until it is time to renew the policy.

Is it possible to prevent my car insurance premiums from rising beyond what I can afford to pay after filing for bankruptcy?

With some careful planning, it is possible to prevent your car insurance premiums from rising beyond what you can afford to pay after filing for bankruptcy. Adding safety features to your car and maintaining a good driving record can help lower your rates.

Will having airbags in my car lower my car insurance rates?

Yes, having airbags in your car can lower your car insurance rates, and you may be eligible for a discount based on those.

How can I keep the cost of auto insurance down if I have filed for bankruptcy?

You can look for ways to keep the cost of auto insurance down, such as adding safety features to your car, like anti-lock brakes, electronic stability control, and anti-theft devices.

Compare The Best Insurance Quotes In The Country

Compare quotes from the top insurance companies and save!

secured lock Secured with SHA-256 Encryption

Benjamin Carr

Former State Farm Insurance Agent

Benjamin Carr worked as a licensed insurance agent at State Farm and Tennant Special Risk. He sold various lines of coverage and informed his clients about their life, health, property/casualty insurance needs. Assessing risks and helping people find the best coverage to suit their needs is a passion of his. He appreciates that insurance was designed to protect people, particularly during times...

Former State Farm Insurance Agent

Schimri Yoyo

Licensed Agent & Financial Advisor

Schimri Yoyo is a financial advisor with active life and health insurance licenses in seven states and over 20 years of experience. During his career, he has held roles at Foresters Financial, Strayer University, Minnesota Life, Securian Financial Services, Delaware Valley Advisors, Bridgemark Wealth Management, and Fidelity.  Schimri is an educator eager to assist individuals and families in ...

Licensed Agent & Financial Advisor

Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.

Free Insurance Comparison

Compare quotes from the top insurance companies and save!

secured lock Secured with SHA-256 Encryption