So, you’re getting a divorce and you need to know how that will affect your insurance. It is very important that you consider the impact that divorce will have on your insurance now and after the divorce is final. Often it is completely overlooked by your advisors and it is good that you’re thinking about it. The first thing you should do is to let your insurance agent know about it and seek his advice.
There are 3 primary lines of insurance that you need to consider:
1) Homeowners or Renters Insurance. Most policies will cover up to 10% of your contents or personal property away from the primary residence. If you move out of the your home, before the divorce is complete, be aware of this limitation. You may want to purchase an additional policy to protect your belongings at the new residence.
2) Auto Insurance. Auto insurance policies define “Who is an insured” as a resident household member. If you move out of the household and take your car with you, you may no longer qualify as an insured under the policy’s definitions. That could mean that you have no coverage. Should you choose to leave the marital residence prior to divorce and take your car with you, it would probably be in your interest to purchase a new auto policy and remove your car from your old policy. Do not attempt to cancel your old auto insurance policy as your spouse will need continuing coverage. You should notify your soon to be ex-spouse of your actions so that they can adjust their insurance accordingly. It is very important that you communicate with all parties involved including your spouse, attorney and insurance agent. There are many issues at stake until the divorce is final. Remember, you’re still married. If your spouse becomes involved in an at-fault auto accident and incurs liability you could be adversely affected.
3) Life Insurance. Life insurance ownership and beneficieres need to be checked. You may need to change beneficieres from your spouse to another family member or trust. This is very important when the wellfare of children are involved. Again, consult with you attorney and insurance agent for advice. This is a very complicated area especially when children and business interests are involved.
