What to Do if You Are Getting a Divorce and Have a Joint Insurance Policy
If you have gotten or are contemplating a divorce, you should know that you can be held liable for claims brought on your joint insurance policy. If you had the car before the marriage, you own the car outright as nonmarital property. If you obtained the car during the marriage, it is marital property that will be distributed equitably in the divorce. If you have a joint insurance policy, splitting your car insurance policy is a step you should take as soon as you get a divorce to ensure you protect yourself from future claims against your ex-spouse.
Even if one spouse is awarded the car during the divorce, the other spouse will still be held liable if they are on the title and insurance. Unfortunately, the process of removal and obtaining a new policy comes with more paperwork, approval, and waiting. Here are the steps you should ASAP take if you have a joint auto insurance policy and are getting divorced.
- Once your spouse moves out, you should update the address of all of your vehicles.
- Obtain separate titles to the cars you will each take after the divorce.
- After your divorce is finalized, you should get separate insurance policies. This cannot be done unilaterally, so both parties must consent. This also means you may not be eligible for the same discounts as you were before. You should make sure to purchase the new insurance policy before you are removed from the joint policy. Most insurance companies require the removed party to sign a removal request to ensure the proper consent has been obtained and to ensure someone is not unknowingly driving without insurance.
- If you have young drivers and they have access to both parents’ cars, they should be insured under both of your new policies. If they have their own car, then this car should be insured under the parent in whose home the child resides most often or who has physical custody, unless the car is titled in their name, in which case they should have their own insurance policy. Who pays for the young drivers insurance should be set out in your divorce decree.
- Speak to an attorney. If you bought your car with a loan and have been making payments, these liabilities should be distributed equitably in your divorce. You will also need to work out which cars are marital property, which are nonmarital property, or how to distribute them if they are co-mingled. Our family law attorneys at Heimerl & Lammers can help make sure you are protected and understand your full rights and obligations.
If you have questions or concerns about your joint insurance policy or the disposition of your cars upon divorce, contact Heimerl & Lammers today at (612) 294-2200.