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Insurance After Divorce: What You Need To Know in 2022

Insurance coverage is an often-overlooked task that both spouses will need to consider when divorcing. You will want to make sure you buy adequate coverage to protect your car, belongings, home, health and more. After a divorce, you will need to let your car insurer know of any changes to ownership or drivers of a car; extend your existing health insurance through COBRA or private health insurance, and determine if maintaining existing life insurance policies is the best choice for your family.

How Does Divorce Affect Insurance?

If you share insurance plans for your car, home and health with your ex-spouse, you will need to get separate policies. If your cars are kept in separate houses, you and your ex will have to get individual car insurance to reflect your new addresses. If you don’t have a separate health insurance plan from your employer or on your own, you will need to find a health provider after a divorce. Your homeowners insurance will go to the homeowner. If there are any changes to the personal possessions within the house you should let your insurer know.

Does Divorce Impact Insurance Pricing?

Your individual insurance cost could go up or down after a divorce based on various factors like your address, claims history, driving record, insurance discounts, multiple drivers and credit score. Divorce can impact insurance costs if you or your ex-spouse have had a few moving violations or accidents with a shared policy. Plus, you may no longer qualify for a multi-vehicle discount, so you may find yourself paying higher premiums. Plus, insurers rate unmarried people higher.

car insurance costs by marital status in bar graphs

Car Insurance After Divorce

When you divorce, your premiums could change depending on various factors. Removing your ex-spouse could be complicated as it may require their cooperation if they still live in the same residence. Most insurers won’t remove your spouse without their consent or proof that they no longer live at the established residence.

Homeowners Insurance After Divorce

Separating finances and assets can be complicated during a divorce. If you decide to move out of the home and your spouse remains, you could still be found liable for any damages or injuries if your name hasn’t been removed from the homeowners policy. Keeping both names on the policy could complicate matters if a claims check needs to be deposited or if the homeowner is sued.

Health Insurance and Divorce

If you were covered by your spouse’s health insurance plan, or vice versa, you will be dropped from their plan after a divorce. However, if you have children they will not be dropped from health insurance after divorce and can even be covered by two policies.

Life Insurance After Divorce

Life insurance was designed to protect your dependents and loved ones from financial devastation if you die. Many married couples with life insurance list their spouse as the primary beneficiary so they can continue paying the mortgage or rent, pay off debts and financial obligations, feed their family and raise their children. If there are no children involved, there are very few reasons to continue listing your former spouse as a life insurance beneficiary.

If you share insurance plans for your car, home and health with your ex-spouse, you will need to get separate policies.

After a divorce, the easiest way to change the beneficiary is to contact your insurer and determine the next steps. If the policy has a cash value, you may want to cash it out and split the proceeds with your former spouse. If there are children involved, it may be a good idea to continue maintaining a life insurance policy to ensure financial support if you pass. Talk to your insurer or agent about the best options available for you.

How Do I Maintain My Insurance After Divorce?

Your health insurer will likely drop you from your ex-spouse’s plan or vice versa, once you’re divorced. Below are a few options that can help you maintain your health insurance:

COBRA

If you were on your spouse’s employer's health plan, your coverage will likely be dropped. You may be eligible for COBRA coverage for up to 18 or 36 months depending on various factors. You must apply within 60 days of divorcing in order to retain coverage on the same plan. Your first payment for continuation coverage must be paid no later than 45 days after the date that you elected to continue COBRA. If the full payment is not paid before the 45-day deadline expires, you and any family members lose your continuation coverage rights under the plan.

ACA

If you are income-eligible, you can apply for a marketplace health plan. After your divorce, you have 60 days to qualify for the Special Enrollment Period. Otherwise, you will have to wait for regular enrollment to sign up for a health plan, which starts on November 1st.

Employer Health Insurance Plan

If you are eligible for health insurance through your employer, this may be the most affordable option. There may be certain times of the year that you can join your work plan, so talk to your HR department to see if you can enroll due to a qualifying event.

Individual Insurance Plan

For those who don’t qualify for government-run or employer-based health insurance, individual health insurance plans are a great alternative. This is health coverage that you can purchase on an individual or family basis. Those who are self-employed, retired before they are eligible for Medicare or who work for a small business that can’t offer health benefits can all purchase an individual insurance plan.

Your individual insurance cost could go up or down after a divorce based on various factors.

Short-Term Health Insurance

If you cannot get a marketplace plan, short-term health insurance may be a viable option until you find the perfect policy for you and your family. Costs tend to be higher and they may not cover pre-existing conditions, so it may be best as a temporary measure.

FAQs

How long can a spouse stay on insurance after divorce?

You will need to get your own car insurance as soon as you move into a new residence. For health insurance, once your divorce is finalized, you will likely be dropped from your spouse’s plan. You should immediately make changes to your homeowners policy reflecting which spouse has moved out. Life and disability insurance will not automatically drop you unless you request a change in the policy.

Can you remove a spouse from an insurance policy before divorce?

No, you cannot remove your spouse from your insurance policy before the divorce without their approval. The only way to remove your spouse prior to divorce is if both parties consented to the policy change. However, after your divorce, you can legally remove your spouse from your insurance policies.

Is it better to put single or divorced on an insurance application?

There shouldn’t be too much of a difference if you’re listing yourself as single or divorced when applying for insurance. Your premiums are impacted by many different factors, including your zip code, driving history, claims history and marital status.

Key Takeaways

  • Once you or your ex-spouse moves out, you should update your home and car insurance policies.
  • After your divorce is finalized, contact your homeowners insurance company to update your personal property coverage limits.
  • Divorce is a qualifying life-changing event that allows you to enroll in health insurance coverage outside of the Open Enrollment Period.

Find Out More About Insurance After Divorce

Protecting yourself and your family is the best way to enter a new chapter of your life. There are many different options to help ensure that you get coverage, and SmartFinancial can help. Just enter your zip code below and answer a few questions so you can view different policies in your area within minutes.

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