Insurance Matters Following Divorce: Preparing for Changes to Your Automobile Coverage

There is nothing surprising or unusual about one spouse's management of all the family's insurance matters during the marriage. If you were that spouse, then you're in a good position to move forward with a revised insurance plan for yourself and your children. If you were not that spouse, then this article will provide you with a point of reference so you can begin taking control of your insurance needs. During the marriage, both couples are typically listed on the automobile insurance policies for all of their vehicles. The divorce requires that the property be divided — with a change in the certificate of title comes a change in policyholder. If your ex-spouse is paying the premium on your policy, then make sure you don't experience a lapse in coverage for non-payment of premium. Your insurance company should have all of your updated contact information. Should a payment be missed, for any reason, you need to be notified immediately. After an accident is not the time to find out that your insurance has lapsed for non-payment. Once the divorce is final, take the time to review your insurance coverage. The complete description of your coverage will be detailed in the certificates of insurance. Ask yourself whether each policy provides the level of protection you desire for yourself, your children, and your property. For the purposes of today's discussion on automobile insurance, we'll focus on private passenger cars, pickup trucks, and vans, but not commercial vehicles. Automobile Insurance. Now that the divorce is final, you'll be taking a serious look at your finances as you move forward with your new life. Your insurance budget will have to cover a number of policies, including mandatory insurance for your personal automobile, pickup truck, or van. The premiums you will pay for coverage depends on many factors including the make, model, year, and condition of the vehicle, the distances you regularly drive, your gender, your driving record, and your credit history. Credit history. When problems leading up to the divorce included financial issues between the spouses, or even bankruptcy, then negative credit information and a low credit score can result in higher premiums. Although it may seem unfair, under the Fair Credit Reporting Act (FCRA) insurance companies do indeed have a "permissible purpose" for looking into a potential insured's credit information. As a consumer, be prepared for this when you start comparison shopping for insurance coverage. Minimum coverage. Let's start with the minimum legal requirements necessary to get you driving around town. In Arizona, you need a certificate of insurance to register the vehicle in the state. (If you are pulled over by a police officer, you must have your registration, proof of insurance, and drivers license readily available.) The minimum coverage to operate your vehicle legally is bodily injury ($15,000 per person, $30,000 per accident) and property damage ($10,000 per accident). If you decide that you want greater coverage than the bare legal minimum, then your premiums will increase correspondingly. Bodily injury coverage pays for injuries that you cause to others in an accident, it doesn't pay for your injuries. If you want to be covered for your injuries, then you'll need to add medical payments coverage to your policy. Property damage coverage pays for the damage that you cause to other people's vehicles or property, it doesn't pay for the damage to your vehicle from the accident. If you want to be covered for damage to your vehicle, then you'll need to add collision coverage to your policy. If you want your insurance company to pay for damage or loss to your vehicle because of theft, glass breakage, fire, violent weather, vandalism, hitting an animal, and the like, then you should consider adding comprehensive coverage to your policy. Lastly, if you plan to drive your personal vehicle into Mexico, then you will need to purchase a separate insurance policy from a Mexican insurer to drive legally. We recommend that you do so before crossing the border into Mexico. Controlling costs. Divorce can take a toll on one's finances and catching up can take time, sometimes years. Until you have your feet on solid financial ground again, you can usually decrease the amount of your premiums by increasing the amount of your deductible. Be sure to speak with your insurance agent regarding the risks and benefits associated with changing any of your premiums or deductibles before doing so. Be a smart consumer and compare costs. Insurance companies vary significantly in the premiums they charge so save money by spending time to shop around before you commit to a particular insurer. And once you have your policy, always keep your eye out for a better insurance deal. At the Law Offices of Scott David Stewart, we help every client transition into a new independent life after the divorce is final. To meet with one of our family law attorneys, call us today and schedule an initial consultation. Resource: Arizona Dept. of Insurance: Consumer Forms, Publications and Links

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