Having the right insurance is crucial. If disaster strikes, it can cover your losses and keep you from having a financial meltdown. It’s also useful when you need to be able to guarantee you’ll meet your financial obligations.
If you’re getting a divorce, you may already be thinking about a new auto insurance policy and changing the beneficiary on your life insurance. Here are five important insurance changes to consider:
- Life insurance: If you have life insurance, you’ll want to consider changing your life insurance beneficiary designation to someone other than your ex. However, if you will be paying spousal or child support, you could use your life insurance policy to guarantee those payments will continue in the event of your death. A life insurance policy with your ex as the beneficiary may be required by your divorce settlement if you will be paying support.
- Disability insurance: The same principle applies to disability insurance. You may be required to have this type of insurance if you will be paying child or spousal support so that the payments continue if you should become disabled. Disability insurance is a crucial safety net for anyone who earns an income.
- Auto insurance: Once you have determined who will own which car, you will need to get a new car insurance policy in your own name. It’s a good time to shop around for coverage because you may lose your multi-policy discount or other discounts you had before. When your teen is ready to drive, you may need both parents to add them to their policies.
- Health insurance: In many cases, you can no longer be covered by your ex’s health insurance once the divorce is final. However, you may be able to keep that coverage for up to 36 months by buying it through COBRA. Or, you could go to your own employer’s plan or shop for coverage on HealthCare.gov or Arizona’s health insurance portal. Which parent needs to cover the children is up for negotiation, although both parents are equally financially responsible.
- Homeowners and renters insurance: If one spouse has moved out, notify your insurance company. That spouse should consider getting renters insurance to cover their belongings and to provide liability coverage. If one spouse will be keeping the house, the title and insurance policy should be put in their name.
In most cases, people are able to negotiate these issues during the divorce process. If you have questions, talk to an experienced divorce attorney.