Insurance Changes You Need to Make After Divorce

Protecting Yourself with Proper Insurance Coverage

Divorce triggers numerous insurance changes that affect your coverage, costs, and eligibility. Failing to address these changes promptly can leave you uninsured or inadequately covered at a time when you can least afford a financial surprise. This guide covers all the insurance changes you need to make after divorce.

Health Insurance

Health insurance is often the most urgent insurance concern after divorce. If you were covered under your spouse's employer plan, you have several options. COBRA allows you to continue your former spouse's employer coverage for up to 36 months, but you pay the full premium plus a 2% administrative fee. This is often expensive but provides continuity of coverage. Marketplace plans through the Affordable Care Act provide subsidized coverage based on your income. Your divorce qualifies as a Special Enrollment Period, giving you 60 days to enroll. Employer coverage may be available if you work or return to work for an employer that offers health benefits. Medicaid may be available if your post-divorce income qualifies.

Auto Insurance

If you and your spouse shared an auto insurance policy, you will need to separate it. Contact your insurance company to remove your ex-spouse from your policy or establish a new individual policy. Consider that single-car policies often cost more per vehicle than multi-car policies. Your rates may change based on your individual driving record. Update the registered owner and lienholder information on your vehicles.

Homeowner's or Renter's Insurance

If you kept the marital home, update the homeowner's policy to remove your ex-spouse and ensure the coverage reflects the current situation. If you moved to a new home, obtain a new homeowner's policy. If you are renting, obtain a renter's insurance policy to protect your personal belongings. Renter's insurance is inexpensive, typically $15-30 per month, and provides valuable protection.

Life Insurance

Review your life insurance needs carefully after divorce. Your divorce decree may require you to maintain a certain amount of life insurance to secure alimony or child support obligations. Update your beneficiary designations to reflect your current wishes. Consider whether your coverage amount is still appropriate for your new circumstances. If you need new coverage, apply while you are healthy, as premiums increase with age and health changes.

Disability Insurance

As a single person, your income is now your sole financial support. Disability insurance protects that income if you become unable to work. Check whether your employer offers disability coverage. Consider supplemental disability insurance if your employer's coverage is insufficient. Short-term disability covers temporary conditions, while long-term disability covers extended inability to work.

Umbrella Insurance

An umbrella policy provides additional liability coverage beyond your auto and homeowner's policies. If you have significant assets to protect, an umbrella policy is worth considering. Premiums are relatively low for the amount of coverage provided.

Steps to Take

1. List all current insurance policies and identify which need changes
2. Contact each insurance company to update your policies
3. Obtain new coverage where needed
4. Update beneficiary designations on all policies
5. Review your divorce decree for any insurance requirements
6. Shop around for competitive rates on new policies

You are not alone on this journey. Get matched with a divorce support specialist.