Insurance companies are to no one’s advantage when it comes to divorce. The main reason behind this is that the household’s insurance rates increase exponentially after a divorce due to individual coverage rather than family coverage.
When splitting up a household, both partners often question how they will split the cost of the house and what their responsibilities are for each other’s debts and insurance. Before you act, check with your insurance company to find out the process for switching policies. Many companies will require an administrative fee if you decide to change plans. You may also have to provide medical records or have a physical done so that they can accurately rate your plan. Here are important tips to guide you on how to handle insurance when going through a divorce:
Keep the Receipts and Give Them to Your Attorney
Give the receipts of all medical bills related to the divorce proceedings to the family lawyers. This will help show how much money has been spent on medical costs during the legal separation/divorce process that is not covered by health insurance. Your defense attorney can then use this information as leverage when negotiating alimony payments or child support. These types of payments often hinge on the financial state of each spouse.
Transfer Ownership of Insurance Policies to one Partner
Usually, when an individual gets married or enters into a common-law partnership, they automatically become the owner of all insurance policies under that name. A partner can transfer ownership of these policies to themselves if it would be beneficial to do so. Otherwise, there are no legal consequences in not transferring ownership. However, most insurers won’t allow someone else to have access to generate claims with accounts unless ownership has been transferred elsewhere.
When ownership is not transferred to one partner, they can take out an insurance policy later and make the other partner the beneficiary. This ensures that they will receive any benefits or refunds should anything happen while the other partner is still alive. The former partner could also do the same thing unless otherwise specified in court documents.
Split Any Insurance Policies Equally Between Both Partners
This particular option means that each partner takes out individual insurance policies while still maintaining possession of both homes (if children are involved). One person’s name would go on each certificate while both partners continue to pay premiums for their benefit. Furthermore, the family home would remain in both of their names for ownership purposes. However, it is advisable to engage an estate lawyer to guide you on the division of your property.
By considering an attendee insurance program to help you acquire information about your insurance policies, it is possible to transfer one’s insurance policy share to your partner. This can be helpful if an individual no longer needs or has access to a particular policy after separation but wants their former spouse or common-law partner to receive benefits from that one specific insurance plan. Another use could be if someone thought about getting remarried and wanted all of their assets included in the new relationship. When both partners are still involved in each other’s lives, it may make sense for them to divide up each insurance policy equally between themselves so that neither person is paying out more money for insurance coverage.
Enter a Partnership Agreement with One Partner
In some high-risk professions, it may be beneficial for one partner to share the responsibility of any insurance premiums with their spouse or partner. This would be particularly important if one person were going away on business trips overseas where they couldn’t control what happened during their absence from home. With the help of workers comp lawyer, partners could join together under either a marriage contract or a living common-law agreement and include this as part of their legal responsibilities and rights.
If children are involved, there could be an issue where both parents want to receive payouts in case something happens while they aren’t together anymore. One person could also want to retain ownership of insurance policies to ensure they are entitled to payouts should the other partner die. For this reason, it is recommended that you engage a financial planning advisor to help you with planning and having an agreement with your partner.
Purchase Joint Life Insurance Policies
These types of plans allow two individuals to receive financial assistance from a life insurance plan if either one dies. In some cases, the insurance company may even provide a full refund for premiums paid if your spouse or common-law partner lives longer than expected. This type of policy is usually taken out by couples who have been together for five years or more and can benefit those with children who need someone to take care of their needs after both parents pass away.
Seek Help From an Insurance Specialist
Many other options are available when people are trying to figure out how best to handle insurance issues while going through a divorce. One person could retain ownership of every plan while the other is designated as beneficiary or vice versa. They could both split all expenses equally or have one pay for everything while the other reimbursed them later on down the road. Consulting with an experienced specialist who works in this field may help you find other solutions before separating from your former partner.
This means that if you and your spouse, for example, were covered under one household or family plan before getting divorced, then each person will now need their own separate plan. This is very important information that people often do not know about until they are forced into filing for bankruptcy because they cannot pay their increasing bills.
Don’t Put Anything on Any Cars
By law, all drivers must carry liability insurance – no ifs and buts! If you own two vehicles, take one out of insurance; why cover a vehicle you don’t use? It doesn’t make sense; keep only the vehicle you use most often with full coverage (and preferably not an expensive car) and drop the other one entirely. If possible, purchase a junker for very cheap and unregister it, so no one will ever know it exists; this way, there would be no loss whatsoever if something were to happen to it.
If your spouse insists on waiving this coverage to save money, do not let them do it under any circumstances, because while they may think they are saving money now, they will be paying more than double when everything is said and done. After all, if an accident occurs while someone has waived the liability portion of their policy, they will be held personally responsible for the entire bill with no insurance coverage whatsoever.
Don’t Pay for Passive Coverage
How much does it benefit you to have a household plan? Unless all drivers on this policy are living in your house with you, don’t bother paying for it; instead, opt-out and make separate plans so each person can choose their deductible amount. If someone moves out of the house or files for divorce, take that person off of your policy; you don’t need them on the plan when they are no longer living in your home, and the fewer people on the plan, the less expensive it will be.
Raise a Teenager’s Rates
If you have a teenage driver going through high school and college, raise their insurance rate to make up for lost time; this is a common practice but one that often gets overlooked by many parents because they feel sorry for their children. The best way to get around this is by forcing them to carpool or use public transportation after playing with their friends all night long. Sometimes, teenagers forget how wonderful it is not to have a car until they get their first insurance bill after getting their license!
Have a Safety Check up on Your Car
If your car is over ten years old, it may be wise to pass on full coverage because chances are it has depreciated; you won’t need full coverage for an older vehicle that isn’t worth much money anymore, so skip right over the additional premium payments and save some cash! If you have teenage drivers in the home, make sure they get good grades, don’t get into trouble with the law, or miss curfew before you allow them to get their policy; these are just some of the criteria that insurers require to get a good rate on car insurance, so if you are lenient on them, they will be living in your basement until they are thirty years old!
Pay Upfront
The best way to get a good rate is by getting fully comprehensive coverage that includes everything, including third-party liability, fire, and theft for one lump sum instead of paying month after month; whether you go with State Farm or Progressive, it does not matter because chances are both companies offer the same rates unless you have some unique situation. There are several ways to save money on car insurance besides switching carriers every six months; choose an insurer who offers great customer service because great customer service usually means low prices, even though it’s the last thing you would expect. Another way to get that perfect rate is by being an active participant in your insurance plan by calling the insurer to ask about discounts you may qualify for because some companies are willing to offer anything if they feel threatened with competition, so give them a call today!
Bundle Up
Don’t just go after car insurance, but focus on saving money on all of your household accounts; combine your home, auto, life, and pet policies with one company, so you can start seeing some savings each month! Make sure that these bundled plans include everything you need at reasonable rates.
If you have children, put them into their separate plan; this helps to take some of the weight off of your shoulders and cause their insurance rates to go down. In the scenario that your ex is willing to pay for one-half of all medical expenses as part of child support payments, then allocate those costs between yourself and your spouse in the divorce settlement.
Don’t Let Anything Slip Through the Cracks
If your state requires that both spouses name each other on their life insurance policies, don’t assume that it automatically happens when you get divorced. Check with your attorney to ensure that everything has been handled correctly. Then, go back to the same company where you purchased your original coverage and request duplicate copies of your policies. You’ll need these to avoid any snags down the road when filing future claims or transferring ownership.
Don’t assume that divorce automatically wipes out your long-term disability insurance. Typically, your monthly premiums are included in the alimony payments you make each month, but there’s no reason why your ex can’t remain on the policy as a beneficiary. With this approach, if you become disabled after the divorce is final, they will collect some income while you receive treatment or recover from surgery.
Maintain a healthy lifestyle and get regular checkups throughout the divorce process. If you do suffer an injury, be sure to follow up on treatment aggressively so that it doesn’t become a long-term problem that could lead to additional costs down the road if it isn’t resolved quickly enough.
It is vital to follow the set process and hire the necessary lawyers to help you with the best ways of how to handle insurance when going through a divorce. Doing this, you may end up investing in a criminal law lawyer to defend you in court for violating the law. Avoid the expense of a trial lawyer by consulting experts in insurance during the divorce process.
Finally, don’t forget to look at all your options when you’re considering how to handle insurance. Several websites exist to compare rates on individual policies from multiple companies; most offer quotes within minutes. This is a good way to check and see which health care plans and life insurance premiums make the most sense financially after your divorce settlement has been finalized.
