Insurance Costs After Bankruptcy

Filing bankruptcy creates a public record that impacts the cost of premiums when purchasing insurance. Auto, home and health policy premiums are directly affected, as well as credit life policies, home owner policies, and many others. The rationale used to justify increased insurance costs is, at best, dubious. Insurance companies claim that a statistical correlation exists between credit ratings and carrier risk, so that the lower credit rating creates a high risk of loss payments under the policy. Critics claim the statistical relation is fiction, and observe that a high correlation exists between a rooster's crow, and sunrise, yet chickens to not drive the sun.