Car Insurance Companies Included in Petition

[TurnThePage]

To make a short story, I owe money to various car insurance companies. I've pretty much burnt my bridges and can't jump ship. Is it possible to sign up again with one of these "creditors," stay current on the monthly payments, and move the arrears to the unsecured, nonpriority column? I think I read in one of the Nolo books that utilities and other companies can't decline you if you filed Bankruptcy on them.

Any thoughts? JustBroke, Des?

[justbroke]

I had to re-read. You're asking whether you can include them in your bankruptcy as an unsecured creditor? I don't think anything -- other than being a secured creditor -- stops you from listing a creditor as an unsecured creditor on your petition.

Utilities are covered under 11 USC 366 as a sort of extension to the automatic stay. It does, however, allow those companies to charge a deposit and also allows the court to condition that deposit somewhat. I do not believe that insurance is covered as a utility. When they say utility, I'm quite sure they mean "public" utility such as water, gas, electric, and telephone.

Also remember that the insurance companies have some sort of reporting database that they share, so your prior performance could effect your rates. Many of the insurers use an insurance score (similar to a FICO score, but specifically to rate auto or home insurance). Some companies don't use "credit score" for establishing rates, but this may also vary by your State.

I know it's a tough spot as I was with GEICO for years because I was in bankruptcy, and they were the only company that gave me decent rates. Here, in Florida, our rates are higher than in the majority of States. This is because Florida has no-fault insurance, where even most "minor" injury accidents are covered. (But, I personally carry underinsured/uninsured, because 20-30% of drivers have no enforceable insurance policy, yet they are on the road.)

[notreallyme]

I work in the insurance industry, but haven't worked with private passenger in Washington for decades. However, I do know in Washington, use of credit score in auto insurance is not allowed. However, most companies will either decline business or charge a very high rate if there is a "lapse" - a period where you did not maintain insurance. Many states are take all comers - if you meet the filed underwriting rules, they have to offer insurance. Best bet is to talk to an independent agent - they work with many companies and will be up on the current laws. Worst case you can apply to the state assigned risk pool - they cover anyone who can't find a company that will write them. The rates are very high and liability limits are usually basic limits only. Also some states pools won't over collision or comprehensive. A lot of the "substandard" carriers will require you to pay up front, or only offer monthly policies. "The General" has a lot of annoying adds in my state, but at least here will take almost anyone. They are actually owned by american family insurance, so they are pretty solid on their financial stability and ability to pay claims.

[TurnThePage]

Well now I'm screwed because my flawless driving record is meaningless. Apparently there was a lawsuit in Washington State that authorizes the use of a FICO score in determining insurance rates. So I get to pay an extra $100 a month now -- best rate I could find -- as if I got a traffic infraction. Some insurance companies are even requiring a "down payment" on top of the regular monthly payment.