Divorce and Insurance Issues

Posted on July 30, 2020 05:00pm
Divorce and Insurance Issues

When a couple decides to file for a divorce, insurance issues may be the last thing on their minds. Most of us rely on health insurance, car insurance, and homeowner’s/renter’s insurance to safeguard us in case of an emergency. In the event that you and your spouse choose to go your separate ways, you should consider how this could impact your insurance coverage. You may have to look for new coverage, select a new plan, or you might even need to look for a new job that offers the type of coverage you need.

Once the divorce process has started, it’s time to make plans for your future, including planning for upcoming insurance changes. To find out what types of insurance issues you might face, we’ve fleshed out the basics in this blog. Read below to find out what you can do to discover and address potential insurance problems.

Health Insurance

Unless you pay out-of-pocket for your health insurance, it’s likely that you and your spouse share coverage under one of your employers. Although it is entirely possible that each spouse receives coverage from their own employer, many spouses elect to pay for coverage together through the higher-earning spouse’s work. If this is the case, you will need to make a few adjustments when you divorce. If you receive coverage from your spouse, you will need to plan to obtain your own coverage—however, you may have some time to figure that out.

Under COBRA, the Consolidated Omnibus Budget Reconciliation Act, divorced spouses may be eligible to remain under their ex-spouse’s health insurance plan for up to 3 years after the divorce. However, this can be expensive, as you are responsible for the full cost of the insurance premiums without the employer contribution. For this reason, finding more affordable coverage on your own might be the better alternative.

Car Insurance

Most couples share the same car insurance plan, so when you divorce, you’ll probably need to seek separate policies. If you have teenagers who have auto insurance coverage through a family plan, you might choose to stay on one plan together, or you or your spouse might opt to take responsibility for the children’s insurance coverage once your divorce is final. In that case, you should discuss this expense when settling on appropriate child support payments.

If you choose to remain on one plan for whatever reason, make sure you tell your insurer about any changes in residence, that way you both receive the proper documentation regarding bills and any potential issues with payments. Otherwise, if your spouse is responsible for paying for the insurance and he or she stops paying, you’ll be notified that your coverage is compromised. Plus, once you divide property, the ownership of your vehicles may change, which your insurer needs to be made aware of.

Homeowner’s Insurance / Renter’s Insurance

In all likelihood, you and your spouse will not remain in the same household after your divorce. When you go your separate ways, make sure your information on your renter’s or homeowner’s insurance policy reflects those changes. If you both move out of your current home, you can discontinue the insurance and move on, but if one of you remains in that home, make sure the other person’s name is removed from the policy.

Life Insurance

Because life insurance policies differ, there is no single way to handle your policy in a divorce. In some cases, you might leave everything as-is, though in most cases, you should make a few changes to reflect your changing priorities. If, for example, you named your spouse as a beneficiary, you might wish to make someone else the beneficiary after your divorce. Also, remember that your life insurance policy might be something you should consider when negotiating spousal support. For example, you might make an allowance for spousal support within an insurance policy, should the paying spouse pass away and leave the receiving spouse without necessary funds.

Experienced Divorce Assistance

Insurance issues can be complex under the best circumstances, and when you’re in the middle of a divorce, these types of discussions can be overwhelming and confusing. To make the process easier, our attorneys at McKinley Irvin are prepared to help. We have ample experience dealing with divorce insurance problems and we can create a plan that provides you with the coverage and protection you need.

Contact McKinley Irvin todiscuss your case with our experienced attorneys.

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