Car insurance concerns to assess in your divorce

Divorce touches each and every aspect of your life—especially your property and finances.

To get an idea of the car insurance factors that need to be sorted out through divorce proceedings, here are a few key considerations.

Ownership

Any property obtained during a marriage that was not gifted or inherited exclusively to one spouse is considered community property, meaning that spouses share joint ownership of the asset.

If your car was purchased during your marriage, the vehicle is subject to equitable division in a divorce. That means after the value of all community property is assessed, everything will be separated between the two spouses in the most fair way considering the financial status of each spouse.

You and your spouse will need to notify your insurer if the owner or designated driver of your vehicle(s) will be changing after the division of your property.

Separation calls for separate policies

Insurance policies are often determined per household. If you and your spouse have separated, your insurance should be made aware of new residencies. This will require separating your policy as well.

Keep tabs on payments

If your ex-spouse pays for insurance and you are not on the policy record, you won’t be able to track payments through billing and lapse notices.

Payments handled directly between spouses and then paid to insurance are not advisable because it doesn’t create any evidence of the payments to use in case there are alimony or child support payment concerns in the future.

If your insurance policies and payments are not separate, ensure that both members are added to the policy record and provide the insurer with both spouses’ contact information. Otherwise, missed payments you are not aware of could cause you to lose the policy.

Coverage for teen drivers

If you have joint custody of a teenaged driver, you’ll want to make sure they have insurance coverage too. This will require establishing the teen’s residency with one parent or the other — even if the custody arrangement creates a 50/50 split between households.

If your son or daughter is a principal member of a different household after the divorce, they may need to be covered under that parent’s policy.

Choosing who gets which car, how insurance will be handled, who will cover payments for your teen driver and more is challenging. Contacting a lawyer can help ease the difficulty of these complex decisions. An attorney can also help you through related property division issues.