This article has been updated from a previous version.
Navigating the complexities of separation and divorce can hold many unknowns, particularly when it comes to insurance matters.
However, there are several strategies you can use to make sure you and your loved ones maintain the coverage you need, even amidst these stressful times.
It's a good idea to talk to your legal counsel, as insurance may form part of your separation agreement. Here are some tips to get you thinking about what's needed.
Tip #1: Update all insurance policies
The first thing is to review all your existing insurance policies, including your home, car, health, and life insurance. Keep your personal information up to date if you are changing your residence, particularly your address and phone number. Get to know your coverage, specifically who's covered and for what.
In the case of auto insurance, for example, you may need to update who's driving the car, how often, and for what purpose. If you drive one of the vehicles in your former household, you may have to review who is registered as the owner of that vehicle. If the vehicle is registered to your former partner, the auto insurance must be in their name.
Related: What can void your car insurance?
Tip #2: Consider additional insurance
Often, couples are covered under one spouse's medical insurance. In the event of separation, you may be removed from your spouse's extended health policy.
In some cases, your spouse may agree to continue coverage for a limited period during the transition. If this is up in the air, consider buying a supplementary health policy that you can rely on. If you are changing residences[AH1] , remember to buy tenant insurance or home insurance for your new place.
Read more: How your marital status can impact your car insurance rate
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Tip #3: Review beneficiary information
You may want to update your life insurance policy so that your former spouse is no longer a beneficiary. If you have children, you may each have to obtain life insurance for the children's protection.
This provides a safety net if something happens to you before they reach the age of majority. While you’re at it, you should also review your will and the terms of your estate, so your wishes are respected in the event of your passing.
Related: How to transfer your RRSP
Tip #4: Talk to your employer about coverage
Some of your insurance coverage may come through your workplace. Talk to your HR department about updating information for extended health, long-term disability, and similar programs.
If you are not a member of a group plan through your job because you had coverage from your spouse previously, see if you can opt back in. In some cases, it is mandatory for you to accept your employer's health plan if you do not have coverage elsewhere.
Tip #5: Make sure your kids are covered
Taking care of children is usually a priority during a separation. As part of the negotiations, you may agree to keep any children covered under one extended health plan or another. If the child (or children) lives primarily with one parent, you may want to confirm that their belongings, such as expensive electronics and other high-ticket items, are covered under the relevant home insurance policy.
Tip #6: Gather your financial documents
Start by making a list of your assets and their values, which includes investments, savings, pension, and real estate. It’s important to distinguish between marital and non-marital assets.
Then, gather statements for all bank and investment accounts, pension plans, credit cards, insurance policies, loan and mortgage statements, and tax returns from the last three years.
Don’t forget to include your property tax bills and a list of assets like real estate and vehicles. Obtaining a copy of your credit report is also advisable.
This will provide a clear picture of your situation, which is crucial for making informed decisions during the divorce or separation process.
Related: What happens to a mortgage after divorce?
Stay up to speed on your insurance options
Divorce is a challenging experience for everyone. Making sure you have the best insurance coverage can offer a layer of security and peace of mind. Get to know what's available to you during this time of transition.
Don't waste time calling around for home insurance
Use RATESDOTCA to shop around and compare multiple quotes at the same time.
Finding the best home insurance coverage has never been so easy!
