Divorce affects every area of your life – personally, emotionally, logistically, and financially. As you face the changes that divorce brings, carefully review all your insurance policies. Talk with your insurance agent or company to ask clarifying questions, make policy adjustments, and ensure that nothing is overlooked.
Consider each type of coverage
If your divorce has caused a change in auto ownership, consider car insurance coverage to coincide with that change. Removing your former spouse from a policy will protect you against potential liabilities and ensure that his or her name will not appear on any future claim check. Notify the insurance company of any address change as well.
A divorce may mean a new place of residence for one or both spouses. Consider purchasing renter’s insurance if you are moving into an apartment or rental home. If you are staying in your present home, you should remove your former spouse’s name from the policy and consider changes to any property coverage (such as itemized jewelry, expensive collectibles, and/or insured artwork that may no longer be in your possession).
Life insurance is often purchased to cover financial obligations that may occur when a spouse passes away. Life insurance policies may be an element of your divorce agreement. If possible, confirm that the policy on your former spouse’s life will continue to provide spousal maintenance and/or child support, should he or she pass away. If you retain a pre-existing policy, be sure to review and amend the beneficiary so that it reflects your current wishes.
A disability may have an adverse impact on the ability of a former spouse to pay spousal maintenance and/or maintain child support payments. As such, the servicing of such a policy should be included in the details of the final divorce agreement.
If you or your children are covered under your former spouse’s employer group plan, contact the employer to request continued coverage for your children under COBRA (Consolidated Omnibus Budget Reconciliation Act). This should be considered when drafting your divorce settlement paperwork. If you have an individual policy, you may want to consider adding your children to the policy.
Understanding insurance is just one aspect of taking charge of your new life. Whether this change has come due to your own desire or not, be responsible and face the challenge. Community resources are available to you. Don’t be afraid to ask for help! Being proactive is key in keeping your credit score high and maintaining fiscal responsibility now and in the future.
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Whether you’re contemplating a divorce, have already started the process, or are far into the proceedings, do you wish you had someone to share with you the inside scoop on how to save money, time, and emotional energy on your divorce?
Our team is available for Support On-Demand to discuss the many scenarios, options, and implications of separation or divorce, via telephone or videoconference during this time. Feel free to get in touch with us; we are here for you!