OK, maybe somebody out there can make the connection. So, if you declare bankruptcy, a lot of auto insurers are saying that puts you at risk of being a bad driver. Can anyone think of how they could possibly concoct this connection? Guess it means that all of us here are horrible people, worse then murderers, we must be alcoholics, bad drivers, charged more for life insurance (maybe because actions like this cause people to commit suicide?) and just all around nothing but a bunch of bad folks. So how many more indignities are they going to heap on us?
It's simple. Statistically speaking, people with bad credit are more likely to file more, and higher, claims for damages against their insurance policies. Therefore, insurance companies charge bad credit risks higher premiums. I understand that in some states, insurers actually put bad credit risks in the high-risk pool by default, or refuse outright to insure them. If that happens, you're left with only one option, that of getting minimum insurance at maximum cost from the high-risk insurance companies (if even THEY will insure you...). Yes, it's legalized persecution. Still, it's the insurer's right to limit his risk by insuring those who are not likely to cost them money. Insurance is a for-profit enterprise. They aren't in the business of compassion, or altruism. They serve their SHAREHOLDERS, not their subscribers. Some states have passed laws prohibiting insurance rate determinations based on credit.
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