Divorce is never easy. In addition to the emotional upheaval, there are many practical things to think about. Insurance is one that may be overlooked. Whether it's your health, home, life, or car insurance policy, you will likely have to make some changes. That may be the case even if you are separated and not yet divorced.
Your spouse may be listed on your extended health insurance policy, or vice versa. Together, you can discuss whether that should change. It depends on your provider. Some may allow the spouse to remain. Others may want your spouse delisted at the moment of separation or when the divorce becomes final. If your coverage is through your employer, talk to your HR representative about the rules that apply.
If you do decide to get separate insurance, take the next steps as early as possible. If the delisted spouse has a pre-existing condition, it may be harder to get new coverage. Many insurers have a short time limit (for example, 60 days) for that spouse to apply for a new policy without a medical exam or other qualifying procedure.
Your children can normally stay under the same policy. If you and your spouse end up with separate insurance, you can use co-ordination of benefits provisions so that each policy pays some of the children's expenses.
Your living arrangements may change at the time of separation. This means you or your spouse may have to get a new home insurance, tenant insurance, or contents insurance policy. Most home insurance policies also cover personal items that you keep in your car. Your insurer might want to know if the residents of your home have changed, and whether the belongings of the spouse who has moved out should still be covered.
After a divorce, your children may split their time between homes. You and your spouse should check with your respective insurance companies to see how the kids' belongings fit into your coverage. That's especially the case if they carry valuable items like laptops and electronics back and forth between homes.
Your first instinct may be to remove your spouse as a beneficiary of your life insurance. But like many aspects of divorce, it's not so simple. As part of your separation agreement or divorce settlement, one spouse may have to pay spousal support or child support (or both) to the other. But if the paying spouse passes away or becomes critically injured, those payments may be in jeopardy. That can put financial strain on the surviving spouse and the children.
For that reason, some former couples choose to keep the former spouse listed as a life insurance beneficiary, at least until the support payment obligations are met. In fact, in some areas of the country this is mandatory. In Ontario, for example, Section 34 (1)(i) of The Family Law Act allows a court to order a spouse to make a child or former spouse a life insurance beneficiary.
Then there's car insurance. As you're probably aware, much of your coverage -- including how much you pay in premiums -- depends on who drives the vehicle, how often, and for what purpose. If that changes, let your insurance company know. They may revise your premium or recommend updates to your optional coverage. Of course, you will have to take the same step for every vehicle in your household. As soon as you know who's taking what car, have a conversation with your insurer.
Stay Up-to-Date on Your Insurance
Divorce can be a challenging time for you and your family. Making sure your family and your belongings are still covered can add a little peace of mind.