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People with financial difficulties, such as bankruptcy, an IVA (Individual Voluntary Arrangement), a DRO (Debt Relief Order), or bad credit, may face challenges when trying to secure home insurance. This is because insurers assess the risk of each applicant, and your financial history plays a significant role in this assessment.
The good news is that there are specialist providers of home insurance for people with a bad credit history and bankruptcy. Using our bad debt home insurance service, we aim to help you find:
- Cost-effective home insurance for bankrupts
- Monthly or annual payment options
- The cover you need – ensuring peace of mind that your home is properly protected.
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A guide to home insurance for bankrupts and people with DROs, IVAs or bad credit
While it may be difficult to get home insurance if you have a poor credit history, have been made bankrupt or have Debt Relief Orders (DRO) or Individual Voluntary Arrangements (IVA), it is typically not always impossible to get the cover you need.
Many mainstream home insurance providers may consider you a higher-risk client and either refuse to offer cover or charge higher premiums. But there are specialist insurers who cater to people with financial difficulties, including bankruptcy.
These providers understand your situation and may offer tailored policies to meet your needs. By using our online home insurance with bankruptcy quote service, typically we may help you find options suited to your circumstances.
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What is bad credit home insurance?
Home insurance with bankruptcy, IVA, DRO or a bad credit record refers to property insurance policies designed for individuals who have a poor credit history. This includes people who may have missed payments, defaulted on loans, had a County Court Judgment (CCJ), or declared bankruptcy.
Insurers may view you as higher risk due to your financial history, which can result in increased premiums or fewer home insurance options available. However, there are specialist insurers who offer home insurance tailored to people with bad credit, providing you with the necessary cover despite past financial difficulties.
Why is it difficult to get home insurance when bankrupt or with an IVA, DRO or a bad credit score?
It may be difficult to get home insurance when you have a poor credit history, are bankrupt, have an IVA or DRO, because insurers often view people with financial difficulties as higher-risk customers. Here are some reasons why:
- Perceived financial instability: Insurers may assume that if you have struggled to manage debts in the past, there’s a higher chance you could default on payments or fail to keep up with your insurance premiums.
- Higher risk of claims: Some insurers believe that people with financial problems might be more likely to make claims or may not maintain their homes as well, increasing the risk of incidents like theft, damage, or accidents.
- Credit checks: When you apply for home insurance, many insurers perform credit checks to assess your financial reliability. A poor credit history, bankruptcy, or other debt arrangements like an IVA or DRO can lower your credit score, affecting your ability to secure cost-effective and comprehensive insurance.
What are bankruptcy, IVAs, DROs and bad credit, and how can they affect getting home insurance?
Bankruptcy
This is a legal process that can severely impact your credit score and limit your financial options. When someone declares bankruptcy, their financial affairs are handed over to an official receiver, who takes control of their assets to repay creditors. The effects of bankruptcy stay on your credit report typically for six years.
Many standard home insurance providers may reject applications from people who are currently bankrupt or have recently been discharged from bankruptcy, as they may view them as a high-risk client.
If you are offered home insurance with bankruptcy, you may find that the types of cover available are limited, and you may pay higher premiums.
Individual Voluntary Arrangement (IVA)
An IVA is a formal agreement between you and your creditors to pay off a portion of your debts over a set period, usually five years. It’s a legal alternative to bankruptcy and typically stays on your credit report for six years.
As with bankruptcy, an IVA can make it difficult to find standard home insurance policies. Some insurers may refuse to provide cover to people with an IVA. Those that do may charge you increased premiums due to the perceived higher risk.
Debt Relief Order (DRO)
A DRO is a form of insolvency designed for individuals with low income and minimal assets. It’s often an alternative to bankruptcy and lasts for 12 months, during which your creditors cannot act against you. At the end of the DRO, your debts are written off if your circumstances haven’t improved.
Similar to bankruptcy and IVAs, having a DRO can limit your options for home insurance, with restrictive policies and/or higher premiums.
Bad Credit
Having a bad credit record can result from missed payments, defaults, CCJs (County Court Judgments), or any of the financial issues mentioned above. While bad credit doesn’t necessarily mean you’ll be refused home insurance, it can affect the terms and premiums of your policy.
Criminal Convictions
While not directly related to financial difficulties, having a criminal record can also impact your ability to secure home insurance. Many insurers view applicants with criminal convictions as higher risk, which can lead to higher premiums or even refusal of cover.
If you have a criminal record, it’s important to be aware that this can affect your home insurance options in ways similar to having bad credit or bankruptcy. For more information on this topic, see our guide on home insurance with criminal convictions.
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Did you know?
Standard home insurance providers may not offer cover to individuals with financial difficulties or criminal records, but there are some specialist insurers who may cater to these demographics. These insurers are more likely to provide tailored policies for people with bankruptcies, IVAs, DROs, bad credit, or criminal convictions, and they understand that these issues don’t necessarily equate to higher insurance risks.
Tips: How can I get home insurance with bankruptcy, other bad credit, or criminal convictions?
If you’re struggling with bankruptcy, an IVA, a DRO, bad credit, or have a criminal record, you may still be able to find home insurance that gives your home the cover it needs, while at a cost-effective price.
- Try and improve your credit score. While the impact of financial difficulties like bankruptcy or an IVA will remain on your credit report for six years, you can take steps to improve your credit score over time. Paying bills on time, reducing outstanding debts, and avoiding new credit applications can help demonstrate financial responsibility and may lead to more attractive premiums.
- Use a service that connects you to specialist providers of home insurance for people with bankruptcy, bad credit, or criminal convictions.
- Consider opting for a more basic home insurance policy. While comprehensive cover is ideal, basic buildings insurance may be enough to meet the requirements of your mortgage lender and provide some level of protection.
- When applying for home insurance, always be upfront about your financial situation or criminal record. Failing to disclose a bankruptcy, IVA, DRO, bad credit, or criminal conviction can invalidate your policy, leaving you without cover when you need it most.
- Look for discounts. Even with financial difficulties or a criminal record, you may be able to reduce your premiums by looking for discounts. Many insurers offer discounts for installing additional security features like burglar alarms. Increasing your voluntary excess can also lower your premiums.
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Why compare DRO home insurance?
Comparing home insurance with IVA, DRO or bad credit is important for several reasons:
- Finding cost-effective premiums: Different insurers will assess the risk of offering home insurance to someone with past financial difficulties in different ways. By comparing policies, you may find the most affordable premium that suits your budget, as some insurers may offer more attractive rates than others.
- Access to specialised cover: Not all insurers provide home insurance for people with a DRO, IVA or bankruptcy, but comparison may help you find those that do.
- Better policy options: Comparing bad credit home insurance policies ensures you get the most suitable cover for your needs, including – if available – any additional protections like accidental damage or legal cover. Some insurers may offer more flexible terms or include certain benefits that others may not, making comparison crucial to finding the most appropriate policy.
- Avoid overpaying: Without comparing, you could end up paying more for a policy that offers fewer benefits. Comparing home insurance with bad credit options generally ensures you get the most appropriate cover, even with a DRO, IVA, bankruptcy or other poor credit on your record.
How to compare quotes for home insurance with IVA and bankruptcy
To compare quotes for home insurance with bankruptcy, IVA, DRO and bad credit, start by using our service. The platform allows you to input your details once and typically receive multiple quotes from various insurers. Be sure to select filters or indicate that you have an IVA, are bankrupt or have a DRO as some insurers specialise in offering cover to people with financial difficulties.
Compare the cover and the price
When comparing quotes for home insurance for bankrupts, don’t just focus on the price. Look at the terms of the policy, including what is covered, any exclusions, excess amounts (the excess amount is the first part of any successful claim that you are financially liable for), and any add-ons (like accidental damage or legal cover).
It’s important to ensure you’re comparing policies with similar cover.
Make sure you understand the terms and conditions
Some policies might have higher premiums or excesses for people with an IVA, DRO or bankruptcy. Read the fine print carefully to understand the terms and conditions, particularly how claims might be handled.
Check customer reviews and ratings
Once you’ve narrowed down your bad debt home insurance choices, check reviews and ratings for the insurers you are considering. This will give you an idea of their customer service and claims handling, which is important when making a final decision.
By following these steps, you’ll be able to easily compare home insurance quotes even with an IVA or other bad credit on your record, and hopefully find a policy that fits both your needs and your budget.
Did you know?
Even with a history of bankruptcy, IVA, or bad credit, making consistent, timely payments on your home insurance policy can help improve your financial profile over time. Some insurers may lower your premiums when you renew as your financial situation stabilises.
Money saving tips for home insurance with bad credit, DRO, IVA or bankruptcy
We have put together five potential money-saving tips for buying home insurance if you have experienced financial difficulties like bankruptcy, an IVA, a DRO, or have a bad credit record:
- Use specialist bad credit home insurance providers: Mainstream insurers may charge higher premiums or deny cover if you have a bad credit history. Look for specialist insurers who offer tailored home insurance policies for people with financial difficulties. These insurers often provide more competitive rates for those with bad credit or bankruptcy.
- Increase your voluntary excess: Raising your voluntary excess—the amount you agree to pay towards any successful claim — may help lower your premium. Just ensure you can afford the excess amount in case you need to make a claim.
- Check for bundling options: Some insurers offer discounts for bundling home and contents insurance together or for improving home security features (such as having a monitored alarm system). Look for these options as you compare policies to see where you can save money.
- Avoid unnecessary add-ons: Be mindful of additional extras like accidental damage or legal cover. While they provide extra protection, they can increase your premium. Only choose add-ons that are truly necessary for your situation.
- Pay annually: If possible, opt to pay your insurance premium annually rather than monthly. Paying annually may save you money in the long run, as monthly payments sometimes may attract interest.
If you click the button below, you’ll be able to receive quotes from home insurance with bad credit and bankruptcy specialists.
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In summary: Buying poor credit home insurance
Getting home insurance with bankruptcy, DRO, IVA or other bad credit is generally possible:
- Giving you peace of mind your home is protected against unexpected events, and
- Meeting your obligations under any mortgage agreement you may have on your home.
Get bankruptcy home insurance quotes now
To get quotes for home insurance with bad credit, please click the button below.
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Home Insurance for Bankrupts, IVA, DRO or a Bad Credit Record FAQs
Can I get home insurance if I am bankrupt?
In most cases, yes. But you may need to approach specialist insurers, as standard providers may reject your application or charge higher premiums.
Will my home insurance premiums increase if I have an IVA?
It’s possible. Many insurers view IVAs as a sign of financial instability, which may result in increased premiums.
Can I get home insurance with a DRO?
If you have a DRO, you may still be able to get home insurance. But your options may be more limited. Some insurers may see you as high risk and increase premiums or limit your cover.
How does bad credit affect my home insurance options?
Bad credit can result in higher premiums or fewer cover options, but you may typically still find insurance through specialist providers.
What are specialist bad credit home insurers?
Specialist insurers are companies that provide insurance to individuals with unique financial circumstances, such as bankruptcies, IVAs, or bad credit.
Do I have to disclose my bankruptcy, IVA, DRO, or bad credit when applying for home insurance?
Yes, you must always disclose your financial situation when applying for home insurance. Failure to do so could result in your policy being invalidated.
Will improving my credit score help lower my home insurance premiums?
Yes, improving your credit score over time can make you a more attractive customer to insurers, which may result in lower premiums.
Can I switch home insurance providers if I have bad credit or an IVA?
Yes, you can switch providers, but you may find it more challenging to secure a policy with more favourable terms. If you do switch, you must disclose your financial circumstances and history to your new insurance provider.
How long will financial issues like bankruptcy or an IVA affect my home insurance options?
Bankruptcy, IVAs, and DROs typically remain on your credit report for at least six years (it varies on the type of bad credit). During this time, they may affect your ability to secure home insurance at competitive rates.
Can I get other types of insurance with my financial issues in addition to home insurance?
Yes, the panel of insurance providers may be able to help with Bankrupts, IVA or DRO Car Insurance, Car Insurance with Bad Credit or Car Insurance with a County Court Judgement (CCJ) – just complete the simple online quote form with your details for consideration.