Normally, a divorce requires that a person review at least four types of insurance – auto, health, life and homeowner’s (or renter’s). When a couple is married, they normally jointly carry these insurances, but after a divorce each former spouse must review his or her needs and situation.
Car Insurance: Many couples own two or more cars when they are married but switch to one car each after a divorce. A reduction in the number of cars owned normally reduces the premium. If the former spouse has a car with a shared insurance plan, he or she needs to inform the provider about the divorce, just as they did when they got married. If a former spouse agrees to pay for coverage of both cars, the insurance provider should still be informed of the divorce.
Health Insurance: Health insurance can sometimes be a contentious item in divorce negotiations. Sometimes one spouse agrees to provide health insurance for minor children and sometimes a former spouse. Like auto insurance, the divorce must be reported to the insurance provider if the provider spouse wants his or her former partner to stay on the plan. If one spouse is leaving the converge as a result of the divorce, he or she may be eligible for health insurance from the state until his or her job starts offering insurance. In the worst-case scenario, the spouse may decide to stay separated for a while before getting divorced, at least until the other spouse is able to get a separate insurance plan. Care should be taken with health insurance, including proper notification of all changes.
Life Insurance: Sometimes the dependent spouse negotiates insurance as part of the settlement and as a way of protecting his or her income after the divorce. In this regime, the dependent spouse becomes the beneficiary of a policy carried by his or her former spouse.
Homeowner’s or Renter’s Insurance: Renter’s insurance is normally less expensive than homeowner’s. A person who goes from living in a house to living in an apartment does not have to pay homeowner’s insurance anymore, but he or she needs renter’s coverage instead. This protects the renter from theft, fire, or other problems. No one should forget to change the insurance coverage for his or her place of residence.