Divorce: How to handle your auto insurance coverage

Jennifer Nelson

While changing your health or life insurance coverage may take priority in breakup, a splitting couple shouldn’t overlook their car insurance policy.

Typically, haggling over the car insurance involves more than one vehicle. You should contact your insurer once you or your spouse or domestic partner moves out. The insurer will want to know about any new addresses where the vehicles are parked regularly, and about any changes in daily commuting distances.

Oftentimes, the couple keeps their coverage with the same insurer but obtains separate policies. In many cases, the existing policy can be retained by one half of the couple.

A handful of states have rules that prohibit removing a separated or divorced spouse from a policy except when it’s time for the coverage to be renewed. In California, for instance, you must get written permission from your ex- or soon-to-be-ex spouse to cancel a policy.

Who gets the discounts?

You’ll typically both be allowed to keep discounts for being a safe driver (if it still applies) or being a long-term customer, even if a new policy is being set up. “For example, if there is a renewal credit on an auto policy that is now split into two policies, that discount can be added to both,” says Shelley Gerhardt, a broker at South West Independent Insurance in Texas. 

However, you may lose your multicar discount and other discounts.

“Rates can either go up or down when the policy is split – there are over 100 factors that impact the rating of a policy,” says Jo Trevino, a divorce specialist at insurance company USAA.

Billy Van Jura, owner of Birchyard LLC, an insurance consultation company in New York, says a married man and a single man who both are, for example, 25 years old and drive similar cars would get different car insurance rates – in favor of the (presumably more responsible) married man.

“Some companies don’t look as favorably on divorced people, especially men,” Van Jura says.

Who gets the teen drivers?

Gerhardt, the Texas insurance broker, got divorced in 2012. When she and her ex were splitting their car insurance coverage, they had to decide whose policy their teenage drivers would go on.

“If there are youthful drivers on the policy with their own cars, those vehicles should be covered on the policy of the parent with the majority of custody,” Gerhardt says. “In my own case, I have primary possession of my teenagers, so they are on my auto policy.”

In cases where custody is split evenly, either parent can put teen children on his or her policy.  And if teen drivers are sharing your vehicles, one parent still must add the kids to his or her policy.

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