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Which company will insure bankrupt Scots.??? BEWARE

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On tonights news there was a guy from an accountants firm saying that during 2013 he expected 400,000 Scots to be made bankrupt. OMG what a horror story.

Almost a year ago i was looking for insurance and found two suppliers who appeared to offer what i was looking for. One was a large supermarket chain so i started to complete the quote form. The premium was to be paid in full on signing up.


I was horrified to be asked if at any time I, OR OTHERS IN MY HOUSEHOLD had ever been made bankrupt. What could possibly be the relevance of this question if premium paid in advance?

This got me wrankled so i contacted the supermarket and asked why they required to know this information considering the insurance was for a small amount.


Their reply was that the FSA required them to ask this question, so i contacted the FSA and asked them why.

The FSA replied that they did not require any insurance co to furnish this information and suggested that i ask the supermarket under what section of the FSA regs. this info was required. The supermarket failed to comment on the FSA question for months until i got pretty heavy with them and threatened to involve the news papers.

At this point they said that if someone became bankrupt, own fault or not, they were considered to be of higher risk of fraud!!!!!!!!!!!!!!!!!

I thought this to be utterly disgusting and have never dealt with this supermarket since.

On checking a few other insurance websites i found that the supermarket was not the only insurance agency to have the question of bankruptcy on their application form.


So, how do bankrupts get insured for every day needs???? Or put another way, how many basically honest people have had to lie just to get insurance cover???

What are the 400,000 going to do for insurance?

The accountancy chap reckoned that this trend would continue well beyond 2013, which begs the question, "What will the Ins. Co's do if a large percentage of the population become bankrupt?"

They won't be able to "Cherry Pick " as they do now.

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Direct Line companies are worth a try.

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I work In the insurance industry. Bankrupt people are considered to be a moral hazard by some insurance companies in terms of the risk of a claim occurring, including the one I work for.


Generally though, Insurance companies want to know up front what type of customer they are dealing with. When it gets to a claim stage, if the insurer finds out that the customer failed to disclose that they have been bankrupt and/or had CCJs then they lose faith in the customer. How could they possibly then trust that the claim is genuine? They can't.


The only way to get insurance is with a company that is happy to accept bankrupt people, and certainly not by lying.


With regards to the supermarket you spoke to, It wouldn't be fair to say that bankrupts are more likely to commit fraud. That would be one step too far.


My advice - speak to a broker, who will do some phoning round and speak to insurers that are likely to take you.

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as JPD070 said, the underwriting critera takes this issue into account for their risk, their risk profile suggests that the possibiities of a claim are higher. This is just how it works. Suggesting fruad as the only risk is just a bit misguided of the particular person, although it probably is a consideration.

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As it happens i did have a person in my house who was made bankrupt. This came about because they worked (self employed) for a large company which went down owing my friend thousands. With no money comming in he couldn't pay his suppliers. A thoroughly decent chap put in this position through little fault of his own.

As far as fraud is concerned, i think that any individual who has the ability and desire to commit a decent sized fraud, is well capable of escaping bankruptcy.

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Bankruptcy often indicates someone is poor at managing their money. People who are poor at managing their money often have financial difficulties (even after going bankrupt). People who are in financial difficulties are more likely to commit insurance fraud. I work for an insurer, and we've started loading premiums for people with poor credit history.


You're probably thinking 'how outrageous to say I'm likely to commit fraud just because I'm bankrupt' - insurance works on huge generalisations though, so it's nothing against you as an individual.


Your best bet would be to speak to a local insurance broker, as most online 'off the peg' insurance won't be suitable for you.

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Well it doesn't apply to me thank God, but i know of several people, who no fault of their own have landed in severe difficulties----some are far better money managers than i am.

In my experience, both business and domestic, insurance companies and banks just want to cherry pick their customers-----may be very difficult for them in future if this accountant guy is right.

I still don't think that asking this question is acceptable where a premium is being in full and in advance.

What if a person is made bankrupt just after taking out a policy??

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