Going through a divorce is an emotionally trying time, even if the split is amicable. If you have children, your first thought is likely to be a concern for who will receive custody. In addition to the emotional and mental exhaustion that comes with divorce, you may be concerned about your future financial wellbeing. You might focus a lot of time and energy worrying about money or assets like vehicles or your house.
Your various insurance policies are probably not your biggest concern. You may not even realize how important it is to make changes to your insurance when you go through a divorce. Even though it’s another thing to do during the divorce process, you should take the time to go over your existing insurance policies. Below are some common changes to insurance when going through a divorce.
Who Is Involved in Insurance Changes During Divorce?
You may not think it’s important to worry about insurance until your divorce is finalized. Insurance policies and premium payment may be a part of your divorce settlement, however. As such, it’s important that you read through your policies and alert your insurance companies of your updated marital status.
Your lawyer will most likely want a copy of your policies, as well as any documents you may have regarding insurance. It’s also important to let your employer know about your divorce if you have insurance benefits from work. This way, the human resources department can start updating your information and make necessary changes to policies you may have.
Car Insurance Changes
Once it has been decided how vehicles will be divided in the divorce, you will need to make the necessary changes to your auto insurance policy. If you are keeping the existing policy, contact your insurance company and let them know about your divorce. You can then remove the vehicles you will no longer own from your policy. Be sure to remove your former spouse as a second driver on the policy as well.
For those who decide to find new car insurance, cancel your existing policy as soon as you’ve found new coverage. When looking for a new auto policy, check if you qualify for any discounts. If you are moving to a new address after the divorce, get in touch with your insurance provider so they can update your information.
Life and Health Insurance Changes
Depending on your divorce agreement, your life insurance may or may not change much at all. Many divorce settlements require that an ex-spouse is listed as the beneficiary to cover the loss of alimony or child support if the policyholder were to pass away. Other settlements will require a new life insurance policy specifically for the benefit of a former spouse. If your situation does not require life insurance coverage for your former spouse, however, it’s important to remove them as a beneficiary.
Health insurance is another major change when going through a divorce. More often than not, spouses and dependents are on one health insurance policy. You can keep your existing health insurance plan if it is through your employer. Note that even for employer-sponsored health insurance, your status will likely change from a family plan to individual insurance. This change likely results in different premiums. If you are on a spouse’s plan, however, you will need to obtain your own health insurance. You can stay on your former spouse’s plan for a temporary amount of time through the Consolidated Omnibus Budget Reconciliation Act or COBRA. Prices for COBRA coverage are usually more expensive because you will be required to pay the full premium amount, including what was paid by your spouse’s employer.
Choosing not to use COBRA benefits gives you two other options for health insurance after a divorce. You can either search the healthcare marketplace for a plan or elect coverage from your employer if it is available. Divorce constitutes a special enrollment period for health insurance so you do not have to worry about waiting for open enrollment to get a policy.
Changes to Your Living Situation and Home Insurance
Your living situation is very likely to change in a divorce. If you and your spouse owned a home together, the person who is awarded the house in the divorce agreement will be responsible for the homeowners insurance. Let your insurance provider know right away when a spouse has moved out. If you are the new sole owner of the house, you will need to remove your ex-spouse from the insurance policy.
Alternatively, if you are moving out of your house and into a rental, you should consider shopping for renters insurance. A renters insurance policy will help protect you and your belongings in an apartment or rented house. Renters insurance not only covers your belongings in the event of a fire or theft, it also provides liability protection for injuries or damage that you are found to be legally liable to pay, subject to the coverage limit and policy exclusions.
Insurance Changes for Your Children
If you and your former spouse have children, there are insurance changes that specifically affect them. For children of driving age, both you and your former spouse may have to add your children as additional drivers on your new auto policies. Be sure to double check with your insurance representative to see if this is something you will need to do.
Your divorce settlement may have new requirements for your children’s health insurance. For example, they may be added to one spouse’s employer-sponsored insurance offering, while the other spouse may have to pay half of the premium.
Choosing Insurance During a Divorce
The emotional and financial burdens that come with divorce may often overshadow the changes you face in your various insurance policies. Don’t let yourself be caught off-guard and left without an important insurance policy because it wasn’t on your mind. Give us a call at 1-800-640-2920 to explore your car, renters, and homeowners insurance options when going through a divorce.
Disclaimer: The above content is for informational purposes only and is not a direct representation of coverages offered by Wawanesa or its policies. The information does not refer to any specific contract of insurance and does not modify any definitions, provisions, exclusions or limitations expressly stated in any contracts of insurance. All references within the above content are illustrative and may not apply to your situation. The terms and conditions of the actual insurance policy or policies involved in a claim are determinative as to whether an accident or other loss is covered. To understand the coverage under your current policy, please log into the account management platform to review your policy or contact an agent directly.