Bankruptcy Friendly Auto and Home Insurers

[muneco]

We filed chapter 13 in July 2015. The next spring when our home and auto insurance policies were up for renewal we noticed around a 25 percent increase in both policies compared to the previous years. I contacted the insurance agent and complained about the policy premium increases. He swore the increase in both policies was just a normal annual increase and not due to us filing bankruptcy. I felt the increases were due to taking a hit on our credit score (which was in the high 700s before filing BK). Well. the policies are up for renewal at the end of March and the insurance company has increased the premiums on both policies by almost an additional 25 percent. Since I still have 4 1/2 wees before the current policies expire I am going to do some serious shopping around to see if we can get better rates. Does anyone know of any insurance companies that don't use credit scoring to set insurance premiums. We reside in Texas which is one of the highest cost states for insurance. Thanks!

[justbroke]

I think it depends on the State, but GEICO never used scoring for me in Florida. A friend of mine recently shopped insurance and GEICO was not the cheapest, even though I had suspected that others would be more expensive. Insurance scores certainly affect your policy prices, but my vehicle insurance had been going down as the cars aged (newest car a 2014 with the other a 2012). Of course we have "good driver" and other discounts.

I would shop around as you never know what you're going to get.

[muneco]

@justbroke: Thanks for the great info! I'll contact GEICO for a quote. This evening one of my relatives told me it is sometimes better to use an independent insurance agent as they have access to many more insurers and can try to get the best possible quotes. It is just so frustrating when you have never been late with a premium payment, never filed a claim, never had a speeding ticket and etc. and then the insurance company you have been loyal to slams you. Oh well. just another one of the "punishments" for filing BK.

[justbroke]

I can tell you that I've been with GEICO since 2003. They never punished me for my bankruptcy. I believe that many of the other insurers use "insurance scoring models" which don't look favorably on most negative information on a credit report, including, but not limited to, bankruptcy. I think there are some online engines that will also send your request out to multiple insurers. I do like the idea of using an agent that isn't bound to any one particular insurance company/underwriter.

(How or whether insurers can use scoring may be based on your State's laws.)

[mavric]

Same thing happen to us. Had Geico for 10 years ,never anything. Had farm bureau for home ,both went up.
I spent a day calling everybody , Best I found was Safeco for car and Farmer's for home.
Cut my car ins in half and saved about 20% on home. Good Luck

[muneco]

mavric and @justbroke: Thanks for the info. It looks like there is hope in getting a decent rate by shopping around. Of course, they will all want to run your credit which will place a "hard' inquiry on your credit reports.

[switch625]

I have GEICO and don't think I've ever had an issue with increased rates that may be due to credit rating and history. You might want to try CURE Insurance who advertises that they don's use your credit history to set rates.

[muneco]

Unfortunately, it appears CURE only covers PA and NJ residents. I appreciate your reply and I will be getting a quote from GEICO.

[PatG]

According to a survey by Conning and Co., over 92% of all major insurers, includingGEICO, use credit-based insurance scores to help determine insurance premiums in most states.

I have been an insurance agent for 12 years. The bankruptcy should not affect your rates with a company unless they rerun your credit at renewal. This does not happen very much anymore and you would be notified. When you shop for insurance it is not a hard inquiry on your credit, it is a soft hit. It does not show as a hard inquiry.

[muneco]

The bankruptcy should not affect your rates with a company unless they rerun your credit at renewal.

Apparently our current insurance company did re-run our credit this time around. In the policy documents there is a page concerning credit scoring that shows how our home and auto premiums were affected by the derogatory items due to filing BK. When we signed with this insurer several years ago our credit report was spotless.

When you shop for insurance it is not a hard inquiry on your credit, it is a soft hit. It does not show as a hard inquiry.

I did not realize that fact. Thanks for all of the great information!

[dmc-2008]

I have been with Geico since before I filed And mine has never increased either, knock wood.