ljubaphoto / Getty Images Many of the logistics depend on your state of residence and your insurance company, so splitting policies will look different depending on the people involved. In this article, learn key details you need to know for how to separate a car insurance policy in a divorce.
Deciding To Separate Car Insurance Policies
When starting the divorce process, you likely will have to make several decisions on how to separate your assets. When it comes to car insurance, you can remove your spouse from your policy even while you’re separated and the divorce is not yet finalized, said Jill Roth, executive vice president of Virginia insurance company Ahart, Frinzi & Smith. Most insurance companies require married couples to share car insurance policies for all cars that are kept at the same residence. If you move during or after a divorce and take one of the cars with you, it is likely that your premium will change and for that reason, most policyholders require separate policies in this case. According to the Insurance Information Institute, of you or your former spouse changes your address, you should get a separate auto policy immediately. When the divorce occurs, Roth said, “the standard approach is to endorse the current policy to show only one of the insureds [and their vehicle] and take out a separate policy for the other spouse.” However, some carriers may simply cancel the existing policy and issue new policies to both spouses. Before making any changes, it’s important to speak with an insurance agent to get advice about your specific situation.
How Divorce Impacts The Cost of Car Insurance
Whether your policy is split off or you stay on the existing policy, your annual rate could go up or down based on your driving record, claims history, discounts for multiple drivers or vehicles, and your credit history (in some states). If your former spouse had a few accidents on their record, they could have been pulling down your score, so your premium could decrease when you separate car insurance policies. But if you’ve had claims and your ex didn’t, you may be the one facing higher rates. Many financial factors are in flux during a divorce, Roth said. For example, refinancing a house or buying a car can impact your insurance score—a unique score each insurer maintains based on their rating systems. However, each proprietary rating system is different, so some factors may have a bigger effect on one company’s policies than another’s.
Steps To Separate Your Car Insurance After a Divorce
Separating your car insurance after a divorce takes some planning and research before the divorce is finalized. Below, find the recommended steps to follow when separating your auto insurance policy.
Call Your Insurance Agent
When you know your separation or divorce date, contact your agent or insurance company in advance. Find out how your current insurer deals with cars, addresses, separation, and divorce, and start to research new auto insurance options with your post-divorce information, such as a new ZIP code. If one of you has moved out of your previously shared home, you’ll need to update the garaging address for the moved vehicle if it will stay on the same policy, or take out separate policies for each spouse. Talk to your agent about your situation.
Sort Out Vehicle Titles
If vehicles were previously titled in both spouses’ names, the cars are often retitled to be in only one person’s name. Contact your insurance agent and your state DMV office to determine the correct process. You may also need to update state registration and title records if you’re changing your last name due to the divorce. Typically, agents like to separate insurance policies as close to the DMV retitling appointment date as possible, Roth said.
Submit a Signed Removal Request
Finally, you will have your own policy for a car titled in your name. Ensure your new policy is in place before removing yourself from the previous policy. You will usually need to sign a removal request.
Make Sure Your Teen Is Covered
If you have children with your former spouse, there are other factors to consider when separating car insurance policies. In most situations, all household members with a driver’s license must be listed as drivers on the insurance policy, which means if you have a child of driving age, they will need to be listed on both parents’ policies. It may be possible to add a teen to only one parent’s insurance, even if custody is shared 50-50, but that depends on the policy. The General, for example, requires your child to be on a if they drive your car more than 12 times annually.
