What Happens to My Insurance After Divorce?

Navigating insurance after divorce can be a complex task, especially if you have multiple types of insurance policies. Your rates may change, joint policies may need to be canceled and beneficiaries on record may need to be updated.

Read on to learn what you can expect to happen to your existing insurance policies after a divorce, plus what coverage you may need to get as a replacement.

On This Page

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  How Does Insurance After Divorce Work?

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  How Does a Divorce Affect My Insurance?

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  Will a Divorce Impact My Insurance Rates?

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  Can I Maintain My Insurance Plans After Divorce?

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  FAQs

How Does Insurance After Divorce Work?

A life-changing event like divorce initiates a shift in your insurance circumstances. During the divorce process, insurance coverage often remains unchanged as you are still legally married. However, after a divorce, you may become individually accountable for your auto, home, health and life insurance policies.^[1][2]

For example, you may need to seek alternative coverage if your health insurance is through your spouse's employer. Similarly, shared car insurance must be divided based on who retains ownership of the cars, potentially requiring new premium evaluations. You will also want to update the beneficiary if you had a life insurance policy and your ex-spouse was the one listed.

How Does a Divorce Affect My Insurance?

Below, we’ll break down how divorce can affect the various types of insurance you may hold.

Car Insurance After Divorce

When you separate from your spouse, your joint car insurance policy doesn't automatically divide itself. You'll need to contact your insurance provider to discuss the changes to your plan.^[1]

Assuming you are living separately from your ex-spouse, you should each have your own car insurance policy. In addition, if ownership of a car that is jointly shared or under your ex-spouse’s name is being transferred solely to you, you will need to update the title. Otherwise, you may run into trouble with your insurance carrier agreeing to insure a car you legally do not own.

Naturally, this will change your premium, as the number of insured individuals and vehicles will differ. You may also lose savings resulting from a multi-vehicle discount applied during the marriage. On the other hand, if your ex-spouse has a less-than-stellar driving record, you will no longer have that high-risk factor driving up your rate if your record is clean.

Home Insurance After Divorce

If there's an official change in homeownership, such as from joint to single, the homeowners policy should reflect this change. Notify your insurer of changes to ownership, occupancy or personal property so the insurer can ensure you have the right policy type and coverage. When the time comes to move out, contact your home insurer to update your personal property coverage limits and rewrite the policy under the correct homeowner's name.

If you're the one moving out, new homeowners or renters insurance will need to be purchased for your new place of residence.

Health Insurance After Divorce

If you were insured through your spouse’s employer, you may be allowed to maintain that insurance plan for up to three years under the Consolidated Omnibus Budget Reconciliation Act (COBRA).^[3] However, your ex-spouse’s employer will no longer subsidize the cost, and you will have to pay the full premium.

If you need to buy health insurance coverage immediately, divorce triggers a special enrollment period (SEP) of 60 days starting on the day of the divorce.^[3] This means you can buy an ACA Marketplace health insurance plan outside the open enrollment period, which is usually in the fall.

You can also enroll in Medicare if you are 65 or older or have a qualifying condition and Medicaid if you meet certain income requirements. You may also be able to get short-term health insurance through private carriers.^[2]

While it's generally not feasible to keep an ex-spouse on your health insurance plan post-divorce, some circumstances may allow for continued coverage. For instance, obtaining a legal separation or a limited divorce rather than a full divorce may allow the current health insurance structure to remain intact, although this will vary based on state laws.^[4] It's worth noting that removing a spouse from a family health insurance policy can decrease premiums, deductibles and out-of-pocket maximums, since there are fewer individuals to insure.

Life Insurance After Divorce

Having a divorce may mean some changes to your life insurance policy. If you are not required to make alimony payments, you generally should not have any problems removing your ex-spouse as the beneficiary.^[5] You could then designate a new beneficiary, such as your children if they are not already listed or your new spouse if you remarry.

It’s critical that you update your life insurance beneficiary to avoid future disputes over who is entitled to the life insurance settlement.

On the other hand, if a divorce court rules that you must pay alimony and child support, then you may be required to keep your ex-spouse as the beneficiary so that they are financially supported if you die. In some cases, you may even be court-ordered to buy life insurance if you do not have an existing policy.^[5]

Some married couples purchase a joint life insurance policy during their marriage, and unfortunately, it is not always possible to split it into two separate policies.^[6] You may need to cancel the policy and buy two separate life insurance policies. Keep in mind that if you decide to cancel the policy and it has accrued cash value, the value may be considered a marital asset to be divided between the spouses under state law.^[5]

Disability Insurance After Divorce

Individual disability insurance — not to be confused with SSI disability benefits — is often overlooked in divorce proceedings, yet it plays a crucial role if you're receiving alimony or child support from your ex-spouse. If your ex-spouse becomes disabled and unable to work, this could potentially affect their ability to keep up with those payments.

In this case, disability insurance can act as a safety net. It allows you to claim a portion of your ex-spouse’s disability payments in lieu of their usual alimony and child support payments. This way, you and your children have a stream of income until your ex-spouse returns to work. Because of these factors, as part of the divorce settlement, you may want to request that your ex-spouse maintain disability insurance if they work in a high-risk industry.

Will a Divorce Impact My Insurance Rates?

The loss of certain discounts can increase your auto insurance premium. For example, many insurance carriers offer a discount for insuring multiple vehicles on a single policy. If you and your spouse each own a car and they’re insured on separate policies, this discount will no longer apply. In addition, some carriers charge lower rates for married couples than single individuals because they’re perceived as more financially stable.

Moreover, downsizing after a divorce could lead to lower monthly rates. For example, say you and your ex-spouse sell the house and decide to each move into separate apartments. Whereas the monthly average homeowners insurance premium can exceed $170, the average monthly cost of renters insurance is $17.^[7][8]

Unfortunately, you may face higher rates if you have to buy your own health insurance plan after being insured through your spouse’s group plan. This is because the cost of an employer-based group plan is subsidized by the employer. Buying your own health insurance means you are responsible for paying the full premium yourself.

If you have a joint life insurance policy with your ex-spouse, you may want to cancel it and buy your own policy. However, you may face higher life insurance rates due to your age at the time you apply.^[9]

Can I Maintain My Insurance Plans After Divorce?

You can maintain your insurance plans after a divorce under certain circumstances. For example, if you received the house in the divorce settlement, you may be able to keep your homeowners coverage. Similarly, vehicles in your name that you keep and are already on your policy can be maintained.

If your health insurance was in your name to begin with, you will keep your coverage after the divorce is final. Additionally, you may be able to maintain coverage for up to three years under the Consolidated Omnibus Budget Reconciliation Act (COBRA), provided your ex-spouse was part of a qualifying employer-sponsored group health plan.^[2]

Your life and disability insurances are, by nature, taken out in your name, so they remain yours. However, you may want to update the beneficiaries on these policies.