Automobile Insurance and Divorce:
Susan and John have been separated for a few months. They have agreed that they will each keep the vehicle they regularly drive. Susan wonders what will happen to the automobile insurance once they are divorced. Will one of them need to obtain a new policy? Can John remove her from the policy without her knowledge or consent? What about their teenage son? Who will pay for his insurance? Many recently separated or newly divorced couples have similar questions. Below are some tips for separating your automobile insurance policy.
If you and your spouse have joint insurance, that is you are both named as insureds on a policy, the insurance company should not delete one of you from the insurance plan, or change the insurance without consent from both of the insureds. To be sure, you may want to call your insurance broker or insurance company to find out their policy.
When you applied for your insurance you informed the insurance company where the automobiles would be primarily garaged, and the average driving distance to work. If you and your spouse are living separate and apart it is more likely than not that there is a change in either the garage location and/or the distance to work. You may want to update your policy information although this could result in a change in the premiums.
If your separation will be for an extended time, you may want to consider separating your insurance policies prior to your divorce. From a liability standpoint this could be for the best since you could each be held responsible for each other’s liability in the event of an accident while you are both covered on the same insurance policy.
After the divorce, you should get separate car insurance. If you stay with the same company, you should be able to keep any credits you have for being a safe driver or loyal customer even though you are applying for a new policy. To obtain the best rates, make sure you compare auto insurance quotes. Your current insurance company may not give you the best rates after a change in marital status even after any safe driver or loyal customer credits.
Typically, insurance coverage for teens is expensive since teens have not had time to develop a good driving record. Additionally, males under the age of 26 typically have higher rates than females of the same age. Usually the easiest and least expensive way for a teen to obtain auto insurance is for a parent to add the teen to their policy. A parent can add a teen to their policy by listing them as a driver, or, if the teen has his/her own vehicle and the parent is also on the title of the teen’s vehicle, then the teen’s vehicle can be added to the parent’s policy. Either way, a parent’s rates will increase. Usually, if a child resides more frequently with one parent then the child should be covered by the insurance policy of that parent. If the child is spending a lot of time with both parents and uses both parent’s cars rather than the teen’s own car, then it might be wise to have the teen insured on both parent’s insurance. If possible, you should consider whether the expense to cover your teen will be shared, and if so equally, or if one parent will pay the premium. If the cost of insurance for a teen is a new expense, and child support is calculated as an “above guidelines case”, meaning the parents combined income is $15,000 gross per month or more, then a child support modification might be appropriate.
(12/10/12)
