What a Divorce Means for Your Insurance
Divorce is unfortunately very real and common for many people. Couples face the difficult task of separating emotionally and financially. This has insurance implications as well. Legal and financial advice will be critical, particularly if there are children involved.
Divorce can have a serious impact on one’s credit standing, both in terms of dividing joint debt that exists at the time of divorce and expenses that come with starting over. Paying close attention to existing obligations and monitoring credit reports at this time is critically important.
A divorced couple will need to decide who gets which car. A change in car ownership will mean a change in insurance. Let your insurance company know about a change of address, who will now be driving the car, and any change in the type or amount of driving that will be done. These details will have an effect on your insurance premium.
If someone needs to buy a new car, new insurance will need to be arranged before the car is registered. Removing a former spouse from the insurance policy also protects you from possible liability if they are involved in an accident and/or get sued.
Divorce will mean a change of address for one or both parties. The insurer needs to know when there is a change in residence and property coverage. For example, if one party leaves and receives the jewelry in the divorce settlement, the insurer will need to know whether to cancel any special coverage for expensive jewelry.
Likewise, if security modifications are made to the home, because one party is now living alone, tell the insurance company. Those security upgrades may qualify for a discounted rate. If moving from an owner occupied home to a rental property, consider getting renter’s insurance to cover personal possessions and liability.
Being aware of the changes that are needed will ensure both parties are in the best position possible. With as much toll as a divorce can bring on someone, it’s easy to oversee the “little” things but they can quickly turn into a major issue if something were to go awry. For further questions on what should be done in regards to insurance changes and coverage, feel free to contact us.
LSB Insurance, a Lincoln Savings Bank company. Not FDIC insured, no bank guarantee, may lose value, not a deposit, not insured by any Federal Government Agency.
Want the latest and greatest from our blog straight to your inbox?