If you're facing bankruptcy, you might wonder how it will affect your car insurance premiums. In Alberta and several other provinces, insurance companies often use credit scores to determine rates, which can lead to increased costs for drivers with lower scores. While Alberta allows insurers to use credit ratings for optional coverages like collision and comprehensive insurance, basic mandatory insurance rates cannot be influenced by credit scores. If your credit score drops due to bankruptcy, you may lose discounts previously applied for good credit. However, you cannot be denied coverage based on your credit score. The impact of a low credit score can vary, with potential savings of up to $200 annually for those with good credit. Critics argue that penalizing drivers for financial hardships is unfair, as many face circumstances beyond their control. Ultimately, while a low credit score can lead to higher costs, it does not bar you from obtaining car insurance.
Read the full article here.