Navigating Insurance in a Divorce
The end of a marriage introduces a host of new challenges to both of your lives. Navigating all the paperwork and division of assets can become quickly overwhelming at a time where your emotions are overtaxed and your future unclear. Fortunately, you have help. Dividing and finding new insurance policies for both of you is an often neglected matter to sort through, but it’s wise to include this topic of discussion early on in the process. Read on for important tips when it comes to handling your insurance policies in a divorce in order to save the both of you a bigger financial headache later on. Make Decisions Early Just like determining who gets your fine china in the divorce, make sure that before filing any divorce or separation paperwork that your insurance directives are clear and fair for all parties. Insurance coverage varies by several factors, including income status, residential status, marital status and other variables. It is likely best to set up your own insurance policy in the event of a divorce no matter what, so start to search around and request insurance quotes from reputable companies in your area. Above all, carefully look over your divorce decree before signing, as it will be challenging to change later on. Health Insurance Maintaining personal health insurance without a lapse in coverage is crucial to avoid both any expensive medical emergencies and any penalties at tax time for the uninsured. If your health insurance policy was covered by your spouse’s employer, don’t wait to find a new plan. Some states allow non-family members to be on a health insurance plan, while others do not. Check your state’s policy, or discuss with your soon to be ex spouse about what options are feasible for you. You may be able to remain covered on their plan, provided you pay for it yourself through COBRA for up to three years. If you or your spouse were covered by a policy provided through your employer, you’ll no longer be obligated to provide the coverage opportunity to them. Auto Insurance Once you’ve decided who gets which vehicle, you will both need your own car insurance policies. Your insurance agent will need to be notified about the divorce so they can remove your spouse as a covered driver on the policy. It’s possible that you will pay more for your own policy, as many carriers provide discounts for multiple cars on the same policy or for married couples. If you need to find your own policy, shop around for quotes from different agencies in order to get the best deal. If you have teenage drivers, decide whose policy will cover them. Most often, policies will cover families at the same residential address, so whomever they primarily live with. In some cases, they will need to be insured on both parents’ policies. Check with your agent to be sure of what your circumstances will require. Life Insurance If either of you have a life insurance policy, you’ve likely named your spouse as the primary beneficiary. Many will choose to keep things this way, especially if there are children involved. In the event of your death, a life insurance policy could be used to provide financial assistance to your children through tuition or child support payments. Life insurance is perhaps the insurance policy most overlooked in the event of a divorce. In fact, it’s so often neglected in divorce paperwork that many states will automatically dismiss an ex-spouse as the primary beneficiary during a divorce. Talk with your insurance agent or other financial advisor to determine what the best course of action will be for you and your situation. You may need to complete additional forms to either maintain your ex-spouse as beneficiary, or to transfer those rights to another individual. Home Insurance In most divorces, at least one partner will need to change residences. Depending on who keeps the primary home or residence, you will need to make changes to your homeowner insurance policies, including your possessions and other assets. If keeping the family home, your policy can be adjusted to include your name only. If you’re looking for a new place to live and are considering an apartment or lease, start researching renter’s insurance. Renter’s insurance will provide coverage for your possessions that are lost or damaged through vandalism, fire or theft. You will also be covered in case a visitor becomes injured, paying a portion of their medical fees. Divorce is something nobody wants to go through, but with careful consideration of your finances and life circumstances, you can better manage all the changes involved in going from a couple to a single individual. Keep in touch with a qualified insurance agent to make sure you’re not missing any details and maintain adequate coverage, so you don’t face any financial setbacks in the future.