As you can imagine, divorce affects virtually every aspect of a spouse’s finances. From bank accounts to utility bills, to auto insurance and everything in between, one of the most sweeping features of divorce is how it impacts a couple’s finances, including insurance.
Though insurance matters may seem trivial in the grand scheme of things, it’s important to be mindful of how your divorce will affect various kinds of insurance so you can avoid headaches down the road.
Here are some ways that insurance changes after a divorce.
1. Your automobile
Once you have decided who gets which cars, you will need separate auto insurance policies. Call your insurer and let them know about the divorce. Have them remove your spouse from your policy, but keep your name on it.
If you’re getting a new policy, be sure to shop around. You may be losing the discounts that you had before, such as the multi-car discount, so you want to compare rates.
2. Your home
Once you are separated and one of you moves out, let your homeowners insurance company know. When your divorce is finalized, the insurance policy should only be in the name of the homeowner.
If you move out and rent a house or an apartment, consider taking out a policy for renters insurance, which provides liability coverage if someone is injured at your home, and it pays for damage if your child accidentally throws a baseball through your neighbor’s window.
3. Your health coverage
If you have your own health insurance coverage through your employer, you can keep it after your divorce, but if you’re a dependent on your spouse’s employer-sponsored health plan, you will have to be removed after the divorce.
If you don’t have your own coverage, after the divorce you can: 1) sign up for coverage through your employer if they offer it, 2) take out your own policy through a health insurance carrier or California’s health insurance marketplace, or 3) keep the coverage you have through your ex’s plan but pay for it by electing COBRA insurance, which provides divorced spouses with up to 36 months of coverage.
4. Your spouse’s life insurance
Often, life insurance will be incorporated into a divorce agreement. Typically, the higher-earning spouse takes out life insurance that would replace child or spousal support in case he or she dies.
To learn more about insurance and divorce, contacta Los Angeles divorce attorney at Claery & Green, LLP. We gladly offer free consultations to all prospective clients.