Divorce affects you in many ways, including insurance. Modern, mundane insurance policies are the underlying security blankets of marriage. Separation and divorce in Virginia can shred that security.
Jump to a Section
- Homeowners Insurance After Divorce
- Divorce & Car Insurance
- Life Insurance & Divorce Settlements
- Divorce & Disability Income Insurance
- Health Insurance After Divorce
Homeowners Insurance After Divorce
The Insurance Information Institute (III) recommends two changes to the status quo after separation or divorce:
- The separated or divorced person remaining in the marital home should change the homeowners insurance policy to show only the name of the person remaining in the home
- The person moving out of the marital home should start a renter’s insurance policy at the least or apply for a separate homeowners insurance policy if buying a new home
If continuing the existing policy with only one name on the insurance, the person keeping the marital home should review the policy and adjust it as needed:
- Replacement Cost — most homeowner policies cover replacement cost for damage to the structure, while a replacement cost policy pays for repair or replacement of damaged property with materials of similar kind and quality
- Extended Replacement Cost — This additional insurance coverage of 20 percent or more over the limits in your policy can be useful if the costs of building materials and labor rise sharply in the future
- Inflation Guard — This is additional protection that automatically adjusts the rebuilding costs of your home to reflect changes in construction costs
Marriage makes couples complacent. You may have overlooked outdated problems in the marital home. When the policy is updated or supplemented, take a look at other things like security systems, sprinkler or fire protection, and reduced risk due to items your ex takes away (jewelry, fine art, and other luxury items that may have required riders).
Divorce & Car Insurance
Insurance aggregator Clovered points out some of the many challenges to insuring multiple cars during and after separation and divorce. Before reassigning auto policies, you and your departing partner may need to change vehicle ownership. Your nearly ex-spouse should take title on the car they predominantly use, and you should take title on your work or leisure vehicle. You cannot insure a vehicle if your name is not on the title.
Both of you should get new policies reflecting the new ownership status. If you need only to remove one name from an existing policy, discuss the details with your local agent.
Auto insurance can get complicated if the two of you have a teenager. Put your teen on both policies, since your neophyte driver may need to drive either parent’s car. Yes, it will be more expensive for each of you, but not nearly as expensive as having an uninsured teen driver facing a lawsuit after a crash.
Talk with your local insurance agent as soon as you separate, since other issues can arise:
- One of you changes address of primary residence
- One of you moves out of state
- Making your ex a secondary driver of your primary vehicle (and vice versa)
- Both of you will lose multi-car discounts
Life Insurance & Divorce Settlements
Life insurance is a standard protection married couples purchase, since modern living generally precludes one-income families. Changing life insurance policies after separation and divorce is vital to keeping both parties protected.
Progressive Insurance recommends keeping each other as primary beneficiaries of your policies if you have children from the marriage. If you two have no kids, you have no financial obligation to your ex. Insurers suggest removing your ex as beneficiary and naming another family member (or a charity) instead. Or, if your policy has a high cash value, you can cash it out (though you may be obliged to give your departing spouse an equitable distribution).
If you will owe spousal support or child support after divorce and currently have no life insurance, getting a new policy can replace the cash value of your ongoing support in the event of your death.
Policies parents typically have on their children (burial insurance) should continue after separation and divorce. Financial responsibility for these policies should be equitably divided as part of the property settlement agreement.
Divorce & Disability Income Insurance
If you two become single parents, disability income insurance is a must-have, as separation and divorce leave two people no longer able to depend on each other for income protection.
In the event of a long-term or permanent loss of income, disability income insurance can help keep children housed, clothed, fed, and nurtured. If you have a policy, consider a review to ensure your loved ones are covered.
Health Insurance After Divorce
Perhaps the most crucial type of insurance, health insurance, still depends on employment. Since the United States is the only one of the 32 modern industrialized countries not to have single-payer (universal) healthcare, separation and divorce can leave each of you without coverage.
eHealth puts it bluntly: “If your spouse had a health insurance plan that covered you, you will be dropped from the plan. If you had a health insurance plan that covered your spouse, they would be dropped from the plan.”
Virginia has a law that allows health insurance to continue while a divorce is pending. A pendente lite order under Code of Virginia § 20-103 can require such coverage. The moment the final divorce decree is issued, however, that insurance stops.
You then have three options:
- Private health insurance — Extremely, cruelly, unmercifully expensive; if you and your attorney choose this route, the costs to you should be considered when dealing with spousal support and equitable property division
- Using your ex-spouse’s policy through COBRA for up to three years
- Using your current employer’s insurance — Divorce triggers an exception to the signup window normally offered only once annually, so whenever you divorce, you can sign up through your employer
Protect your financial future after divorce with The Firm For Men. Contact us today or telephone us at (757) 383-9184. We can set up an appointment to answer all your questions about separation, divorce, insurance, and more. We work for Virginia’s men to protect their rights, secure their finances, and lead happy lives after divorce.