When you're going through a divorce, you have a lot happening at once. Property division, spousal support, child custody, and child support issues will all have to be agreed to or decided in court. Most people never even think about their insurance coverage. However, not properly managing your insurance through your divorce could wipe you out financially if you need to file a claim and find out that your insurance is invalid. Here's what happens to your insurance during a divorce.
Many married couples get health insurance through one spouse's employer. That employer might have better coverage, the cost might be lower, or the other spouse might not qualify for health insurance through an employer.
If a divorce isn't completely bitter, you might want to leave your spouse on your health insurance plan either out of goodwill or in exchange for something else in the divorce settlement. Don't do this.
If you don't update your insurer on your marital status, it could be considered insurance fraud if your ex-spouse tries to claim benefits. Your insurance company may allow them to stay on the plan for a few months until they get coverage, or they will need to purchase their own health insurance as soon as possible.
Generally, a homeowners insurance policy will stay with the house. While divorce proceedings are pending, the marital home and items inside of it will be protected for both spouses.
However, if one spouse moves out, they may need to purchase separate homeowners or renters insurance for their new home and to cover belongings they move into it. Once the divorce is finalized, the spouse receiving the house will need to obtain coverage in their name alone.
Life insurance policies typically automatically remove a divorced spouse. This is both to protect against the rare cases of insurance money-motivated murders and because of the assumption that the insured probably wouldn't want their ex to be paid.
During the divorce, you will need to reassess your life insurance needs. This includes making sure that your children and any other dependents will be adequately cared for. If your reason for holding the policy was primarily for your spouse, you may be in a position where dropping your coverage makes sense.
To learn more about how your insurance coverages will or won't carry over in a divorce, contact a local divorce attorney today.