Bankruptcy and Insurance

Kailasa700

Hi, I posted this earlier on the "Bankruptcy And Living With It" forum but realise I should probably have posted it here instead. Appologies for my stupidity

The original post read:

Hi, I'm wondering if anyone can shed some light on why insurance companies ask if anyone has *ever* been declared bankrupt?

I declared bankrupt in 2007 and was discharged in Jan 2008 (early) so have been discharged about 4+1/2 years now. I am getting back on my feet and am now buying a house. I have tried to apply for buildings insurance for the property but when you read the small print (or sometimes it's under "assumptions") the majority of policies will not cover anyone who has been declared bankrupt or been convicted of a criminal offence. It has nothing to do with paying by installments - this was my first thought

Some policies even state that they will not cover you if anyone living with you has ever been declared bankrupt! It also affects car insurance, although this doesn't seem to be as commonplace as with buildings insurance.

Does anyone know *why* this stance is taken towards bankrupts - and also *why* it's not time limited - maybe to the 6 years the BR remains on file?

The insurance companies have no answers for me. Most simply state that I am classed as a higher risk....but can't tell me why. One at least had the honesty to tell me they simply didn't know!

Obviously there's nothing I can do to change the insurance companies stance on this, but if I'm going to be denied the best deals on insurance for the rest of my life I'd like to at least understand why! Can anyone help?! Thank you!

Quentin

Those insurers who won't insure bankrupts are choosing not to expose themselves to the increased risk of bad debt or fraudulent claims that they perceive taints this group.

InsideInsurance

I would also be surprised if you find it any less common for car insurance than home, it may simply be more often in assumptions or T&Cs for car and more commonly a question for Home

*Scarlett

For some companies the bankruptcy will "expire" when you have been off the list for a certain number of years - might be 5 but I'm not 100% sure.

You will always need to declare it but the longer ago it is, the more likely you are to be accepted.

For this reason you will probably not be able to purchase your insurance online from the majority of mainstream insurers. You can still get quotes and ring any that are competitive to explain your circumstances.

They will take into consideration if it was a personal or business related bankruptcy and some may consider cover if you can pay the policy in full.

You could try

http://www.homeprotect.co.uk/home-insurance/bankruptcy,-ccjs,-ivas.aspx