Can you change your auto insurace while in chapter 13?

[lillymarlene]

I was wondering if while you are in a chapter 13 (11/48 payments in) that you are able to change the amount of coverage on your auto insurance? My car is over 11 years old and has no lien on it. When it comes time to renew in a few months, I was thinking of cutting this insurance down to the "bare bones" to save on the premiums. I'm also considering using a different insurance company.

Is this something that I can just go ahead and do, or must I get permission from my lawyer/trustee first? I'm just trying to fly low under the radar and not get myself noticed.

[momofthree]

You are more than welcome to change your insurance coverage. However, you may be up s**t creek if you total your car, it gets stolen, catches fire, etc. and you don't have insurance to replace it....

Also, you don't have to wait until renewal time, you can change your coverage whenever you so choose, they'll simply adjust your billing to reflect the new rate.

[lillymarlene]

You are more than welcome to change your insurance coverage. However, you may be up s**t creek if you total your car, it gets stolen, catches fire, etc. and you don't have insurance to replace it....

Thanks for your reply, that is what's really holding me up on this. In the past whenever I've cut down insurance, it seems the day after something happens. :-) Maybe I'll settle for looking for a company with the cheapest rates when renewal time comes around.

[jange]

lillymarlene, keep in mind many car ins companies use you credit rating as part of determining your rates. It depends on your state.



20 payments made!

[LadyInTheRed]

If you reduce your insurance premium and don't have any increased expenses to offset the reduction, you have created more disposible income. You are supposed to pay all of your disposible income to your trustee. The increase you are talking about may be too small to interest the trustee. But, just to be safe, I'd call my attorney before decreasing my coverage.

Calling your attorney does not put you on any radar other than your attorney's. Being on your attorney's radar is not a bad thing.

ETA: I agree with momofthree's warning about decreasing your coverage. It's not like you can pull out a credit card if you need to fix your car after an accident or walk into a dealer and get a car loan without having to get the trustee's permission.

[lillymarlene]

Hi jange and LadyInTheRed, thanks for your replies. I don't believe that your credit rating is used in my state, Massachusetts, for determining your insurance rate (at least according to another thread here, but I'll check further.) Then, I don't believe changing insurance companies or coverage would make that much difference in my overall disposable income. For example, another $200 spread over the whole year shouldn't make that much difference. However, it's nice to have every little bit extra for my pocket. :-) I'm also self-employed so my income varies.