If you and your partner decide to go your separate ways, there’s plenty to sort out and insurance probably isn’t your priority. However, you will need to take certain steps to ensure you’re properly protected. Here’s what you need to know.
Separated, But Not Divorced
If you or your partner moves to a new address, you’ll need to update your auto insurance policies straight away. Advise your agent of the new addresses for the vehicles and whether your commute distances have changed. This is normally the first step before you split a joint auto policy.
Whoever leaves the shared home is the one that needs to buy new insurance for their place. Otherwise, they could be without protection if something unexpected occurs. Your existing homeowners insurance policy won’t cover your new home.
Once the divorce is final, you’ll separate auto insurance policies. Most times, if you stick with the same insurance company you can retain most of your credits and discounts, but you may lose some.
You’ll probably still qualify for a safe driver and loyalty discount, but you may not qualify for a multiple car discount now. If you lose your homeowners discount because you now rent, your insurance company may be able to bundle your auto and renters insurance for a new discount.
Other considerations include teenage drivers on a joint policy. You’ll need to sort out who will put them on their insurance policy, and both might need to do so if they split their time living between the two homes.
If they own a car and drive it frequently, generally the parent they live with the most often is the one that registers and insures the vehicle. Nonetheless, you should speak to your agent, because things aren’t always clear cut. Your carrier may have specific rules for insuring your children and their vehicles.
If you have a life insurance policy, you may want to change your beneficiary if you no longer have joint financial obligations with an ex-partner. You can declare another person or minor children as a beneficiary, but minors can’t receive life insurance benefits directly. The courts may assign a trustee of the insurance company may hold the benefit until the children come of age.
A preferred option is to establish a trust through an attorney. You indicate who you want to act as a guardian for your children if you die or you’re incapable and who handles the finances for them.
However, in some cases you may want to leave your ex-spouse as the beneficiary. If you pay alimony for the care of your children it could leave your children at risk without this financial support. You may also want to add a clause in the divorce settlement requiring the beneficiary remains the same unless you consent to a change.
We’ve provided you with very general information, but requirements vary between policies. It is very important you contact an independent insurance agency like ours for personalized recommendations.