Will bankruptcy void your insurance?

With the challenged economy we have seen more doors being closed. It is important to note that upon cancellation of a policy certain steps are taken. Not only you, the policy owner but also the mortgage holder, the company that owns the rented or leased equipment and even the ATM company will be notified that the policy is now being canceled.

If the policy holder does not have enough money to pay the premium then the mortgage holder may choose to cover future payments to protect their interest.

What if there is a claim while the bankruptcy is in process? If the policy is paid then the insurer has the same obligations even if insolvency or bankruptcy has occurred to the insured or the estate of the insured. Be sure that there will be a careful examination of the circumstances to be sure that there is no illegal activity, such as arson. The financial picture of the insured will be examined as part of the investigative process.

When all else has gone wrong there still could be insurance to help cover a claim. Talk to your agent or broker about your specific situation.

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