What happens to my insurance after separation?

At Thistoo, we understand that going through divorce can be emotionally exhausting. It can take a lot out of you and your loved ones to undergo the process. While it is important to consider the big picture in ensuring your divorce and separation are carried out as smoothly as possible, it is equally important to take care of the little details. At Thistoo, we aim to simplify your uncontested divorce in all regards. We try to lay all the necessary information out as clearly as possible. The purpose of this post is to inform you on how to take care of your insurance policies post-divorce.

Getting your finances in order is essential in prepared for divorce.

Couples are often jointly named under auto insurance policies, or are covered for health and dental benefits under their partner’s group insurance plan. When you and your partner are separated but have not yet filed for a divorce, an insurance company cannot remove one spouse from a joint insurance plan without the consent of the other. If only one person is the named insured, then they can add or remove the other party as a beneficiary without their consent.

With a divorce, things become a bit more complicated, especially in regards to joint insurance policies. It is imperative that parties involved in a divorce review the details of their insurance policies, so that they may add and remove beneficiaries, change the insurance plan if needed, and provide their insurer with the most up-to-date information. 

Homeowner’s or Tenant’s Insurance

The most fundamental insurance-related detail to take care of relates to homeowner’s insurance on the former matrimonial home. If you and your former partner sell the matrimonial home, you will both need to obtain new coverage respective to your new places of residence. If you are the party that will keep the matrimonial home, it is a good idea to inform your insurance company of the circumstances, so that they adjust your policy so it is only under your name. If you are the spouse that is moving out, you might also want to contact your insurance company to set up a policy for your new place of residence.

Contacting and consulting with an insurance broker will allow you to select a policy most appropriate for your new circumstances. Brokers will search for and find a plan that best suits your new situation and budget.

Health and Dental Insurance

After the divorce, it is important to consider whether you are still covered for health and dental insurance. You may be covered for family health and dental benefits as part of your former partner’s group health and dental insurance policy, or a new plan may be required if your ex-spouse removes you as a beneficiary. If you are losing coverage due to divorce, you must promptly call your insurer and inform them that you now require coverage. One thing to keep in mind is that under the Ontario Medical Association Extended Health and Dental Insurance Plan, coverage is terminated automatically after divorce. Coverage for children remains, until the insured party calls the insurance company and specifically asks for any dependants to be removed.

 

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Auto Insurance

Changes to the automobile insurance plans will also be required. If you and your spouse shared a joint auto insurance policy, you will need to attain individual policies after divorce. Similarly, if one spouse retains sole custody of any children after divorce, those children will need to be added as beneficiaries under their guardian’s auto insurance policy. 

Life Insurance

Life insurance policies do not necessarily have to be significantly altered. If the policy is jointly owned between you and your ex spouse, a change can include cancelling the existing policy and re-applying for individual coverage. One thing to keep in mind is that insurance premiums may be significantly increased if your health has deteriorated at the time of your application for a new policy. It is important to keep in mind that if one of the parties is making support payments to the other party, it may be a wise decision to keep the recipient party as the beneficiary under the joint life insurance policy. This is in case the supporting party passes away, the funds from the life insurance policy can serve as support purposes. Members of some insurance policies can request a “life transfer” and obtain separate coverage under another policy without having to cancel existing coverage and applying for a new policy.

At Thistoo we aim to make all aspects of your divorce simple, by giving you the necessary information. Changing and updating your insurance policies can be overlooked because there are so many other things to consider when going through a divorce. To get started on your new life, let Thistoo guide you through the separation process.