Going through a divorce can be a difficult time for all parties involved. On top of all the adjustments you must now make in your personal life, there are plenty of practical matters that must be handled as well - including your insurance.
If you and your ex-spouse had been living together and sharing insurance policies prior to your divorce, it’s important for you to know what updates must be made for you both to move forward.
At Berry Insurance we know that insurance can get confusing, even more so if you’re going through a large shake-up in your life such as a divorce. In this article we’ve compiled which areas of your personal insurance policies you should update after a divorce.
Do I need to update my auto insurance after divorce?
As insurance carriers will typically require all licensed members of a household to be listed on your auto policy, most spouses/partners will simply share one policy. So how will separating from your partner affect this coverage?
Well this can largely depend on the specific living arrangements of you and your ex.
Living together:
When you and your ex choose to remain living together and park your vehicles at the same residence, you both can continue to be insured under the same auto insurance policy. This may make it easier to access each other's vehicles and continue to have multi car discounts applied to your policy.
Living separately:
If you and your ex separate and choose to live at a different address, you will both need separate auto insurance policies. Regardless of whether a divorce has been finalized, auto insurance coverage is based on where your vehicle is parked/garaged, meaning your spouse's vehicle will need its own separate policy at its new residence.
Depending on the ownership of your vehicles, you may have to go through the process of transferring ownership of your vehicle to you/your ex-spouse and removing it from your policy. Removing a former spouse from your auto insurance policy will also protect you in the event that they are involved in an accident and get sued.
Separated parents with joint custody of teenagers with drivers licenses should note that their child will likely need to be listed on both parent’s policies but only be rated on one. Being a rated driver will affect your policy premium, while being listed on a policy notes the driver but does not account for them in the premium.
To learn more about exactly who should be listed or rated on your auto policy, read this guide: Who Needs to be Listed on Your Auto Insurance Policy?
Do I need to update my homeowners or renters insurance after divorce?
When you and your ex decide to separate, you should contact your homeowners or renters insurance agent or provider to begin the process of updating your current policy.
Depending on which one of you will continue to reside in your current dwelling and who is moving out, you may need to rewrite who’s name the policy is under and remove your ex from being listed on the policy. When it is time to remove them from your home policy, you’ll likely be asked to provide documentation of the divorce, such as the divorce deed or decree.
With divorce also comes separation of assets, meaning many of the possessions and personal property currently on your policy will be split amongst both parties. Updating your insurer on these changes of occupancy, ownership, and personal property can ensure your policy continues to properly cover you and that you aren’t over paying for coverage you may no longer require.
With all this change to your existing policy, the spouse choosing to leave will also need to go about obtaining a new and separate homeowners or renters insurance policy for their new residence. For a quick refresher before applying for a new policy, check out our article on what information you need for a personal insurance quote.
Do I need to update my life insurance after divorce?
Many married couples choose to obtain a life insurance policy as newlyweds or after having their first child - providing an income and/or inheritance to their dependents and beneficiaries upon their death.
Since couples generally list their spouse as the primary beneficiary of their life insurance policy, you may wish to make some changes on who would receive compensation if you were to pass. However, parents with joint custody of their children may not want to hastily make any updates, as keeping your ex as primary beneficiary could provide them with finances to pay for expensive childcare after you aren’t around.
Divorced couples looking to obtain life insurance in order to provide financial protection for their children should look into term life insurance rather than permanent life insurance. Term life insurance policies are typically cheaper and can cover a set period of time, such as until your children have grown up. To learn more about the differences between term and permanent life insurance policies and which one you should consider, read this guide: Term vs. Permanent Life Insurance: Which is Better for Me?
Insuring your separate futures
With the closing of one chapter comes the start of another. While divorces can be messy, confusing, and deeply frustrating - taking these first steps to move on can start you on the path to living a happier life.
Now that you know more about how to update your insurance policies post-divorce, you can contact your agent or provider on the specifics of your relationship and how you wish to proceed with your coverage.
Since you’re already updating your policies, check out our guide on why you should review your personal insurance annually for what else you should change. If you’re instead the ex-spouse that needs to acquire a new insurance policy, download our personal insurance worksheet below to prepare the information you’ll need for a quote.
