You never thought it would come to this. But now here you, trying to separate all that you have into his and hers. We know that separating or getting a divorce is stressful and painful. You may or may not be speaking to your ex-partner, but we will do all that we can to make the transition from joint insurance coverage to individual protection plans as smooth as possible.
We have prepared a step by step guide sheet to help you see clearly what needs to be done. There is so much that needs to be done and we would like to help you as much as possible. If you have any trouble, don’t hesitate to call our office and meet with an agent who can help you personally.
As you begin thinking about this transition, here are some important aspects of your insurance that you need to consider:
• Separation
• Auto Insurance
• Homeowner’s or Renter’s Insurance
• Life Insurance
• Health Insurance
Separation
As you and your spouse determine the best way to move forward, separation may be the way you decide to go. At that point, there isn’t any action that we can take with your insurance coverage. In the case of separation (when you and your partner end the relationship, possibly live apart, but have not yet filed for a divorce), you are both still listed as “named insureds” on the policy and we legally cannot delete either from the insurance plan without the consent of both parties.
That being said, there are steps you can take to separate yourself from your spouse without making a total break in your insurance coverage.
• When you or your partner move out, you need to update your auto insurance policy to reflect the new garaging address for your vehicle.
• If you are getting a new place of residence, you will need to purchase another homeowner’s or renter’s insurance policy as the extended coverage on the previous policy may or may not cover your new residence.
As you begin making these changes, we will be with you every step of the way.
Auto Insurance
Once your divorce is final, it is important to separate your auto insurance policy. As you make the shift to a new policy some issues can arise, making the transition complicated.
• You may lose some of your discounts- If you no longer have multiple cars on your policy, you will lose that discount, as well as the homeowner’s discount if you are purchasing a renter’s insurance policy.
• You may keep some of the previous discounts- If you stay with your original insurance company, then you will probably keep certain discounts like the Safe Driver or Continuous Customer discounts.
• Young Drivers- If you have young drivers on your policy, you will need to make sure that they have coverage either on your policy or your ex-partner’s, possibly both if they will be regular drivers of both cars. If your child has their own car, they should be listed on the policy of the parent with whom the most often reside.
As these issues are usually never clear-cut, it is best to meet with your insurance agent to determine what the best course of action is for your situation and your family.
Homeowner’s or Renter’s Insurance
Once your divorce is final, updating your homeowner’s or renter’s insurance policy is fairly simple. All you really need to do is contact our office to update your information and you are good to go.
If you are the spouse staying in the family home you will need to have the policy changed to your name only and may possibly become eligible for certain discounts. A Resource Insurance Group agent will be able to help you determine what you are eligible for.
If you are moving into a new place, contact our office to set up a new homeowner’s or renter’s insurance policy.
Life Insurance
There are so many questions that come with the decision to divorce. Are you paying alimony? Are you receiving alimony? Do you purchase life insurance? Do you change your life insurance beneficiary?
All these – and more – are part of a divorce settlement. Dealing with the finances in a divorce is not easy, and emotions often make things even harder.
If you have life insurance in place, you might consider keeping it in place, with your ex-spouse as the beneficiary, even after the divorce. If you are paying alimony, your ex-spouse might rely on your payments for cost of living and child support. If you delete him or her as beneficiary, you might leave them, and your children, in serious financial turmoil in the case of your death. If you have no financial obligations to your former spouse, you may want to continue your life insurance but name a new beneficiary.
You have the option to declare your children to be the beneficiaries of your life insurance, but be aware that minors under the age of 18 cannot directly receive life insurance benefits. In case of your death, the money would either be managed by a court-ordered trustee, or the insurance company would hold the benefit until the child turns 18. Our best advice to avoid these options would be to contact a family attorney who can establish a trust which can be named as the beneficiary. You can then indicate in the trust which friend or family member will be entrusted to handle the financial issues for your children, and who will serve as guardians. (These can be the same or different people.)
If you are the spouse who receives alimony, you might consider adding a clause to the divorce settlement that the life insurance beneficiary cannot be changed or allowed to lapse without your consent.
Health Insurance
When you are going through a divorce, it can be difficult to determine who is covered and who isn’t anymore. If you were covered through your ex-partner’s insurance you may need to find a new policy under a new provider. You might also consider a COBRA plan which would enable you to continue the same coverage form up to 36 months at your own expense.
If you qualify for COBRA, it can be a relatively hassle-free way to make the transition. However, depending on you situation, it may prevent you from obtaining your own health insurance plan once your coverage through COBRA ends. If this is the case it may be best to find your own plan as soon as possible.
If you have children, compare your and your spouses’ plan, and enroll your children on the better plan. Keep in mind, however, that coverage may change or even be reduced to emergency care if the policyholder (you or your spouse) and your children live in different states due to rules about preferred provider networks.
Seek Help from Experts
With so many variables to consider, the best way to make this transition as easy and pain-free as possible is to consult with an expert. Our agents at Resource Insurance Group know all the questions to ask -- and all the right answers to to give -- to help you make the right decisions.