Last week, we talked about the importance of insuring your health and wellbeing following an Arizona bankruptcy with health and disability insurance. While it is true that it may eat up a bit of your monthly budget, protecting yourself and your loved ones from the unknown can help you prevent much larger expenses in the future.
The same principle holds true for insuring your larger assets like your home and car. While it may seem like a silly idea to insure something that you may lose in a bankruptcy, it is incredibly important to keep these assets insured for the amount of time you do have them, whether it is before, during, or after your bankruptcy case.
The driving factor behind homeowner’s and auto insurance is to protect you from risk and catastrophe. Even if you know that the bank is going to foreclose on your home, or that your car could be repossessed to pay off creditors, you will be held liable for any damage or injury that occurs while the property is still in your name.
For instance, if you have vacated a home in preparation for a foreclosure or short sale and but your neighbor slips and falls on your property, you could be found responsible. The same goes for any bodily harm or property damage you cause with your car. A good rule of thumb is that if a home, apartment, or car is in your name, it should be insured.
The Challenge of Getting Insurance Following a Phoenix Bankruptcy
Insurance companies often have a lot of interest in your credit history, and for good reason. Studies have shown that policy holders with good credit submit fewer claims than those with poor credit history. Couple that with the fact that companies lose money on unpaid premiums, and you may begin to see why the rates you are being offered seem much higher than before your bankruptcy.
The good news is that every insurer places different weight on credit history, so it pays to shop around and compare rates from several companies. Even if your starting rate is a bit higher than you would like, you may find that after a few years of diligently building your credit, lower rates will already be made available to you.
If you have questions about insuring your property before or after bankruptcy—or even about the filing process in general—the Phoenix bankruptcy attorneys at Curry, Pearson & Wooten are available with the answers you need. Contact us today for a consultation with an experienced consumer bankruptcy lawyer at 602-258-1000, and get started on a better financial future today.