Most of us are well aware of how important it is to have insurance coverage. Whether it be life, car, home, or health insurance, it is common practice to exercise caution and ensure that both ourselves and our families have adequate coverage should misfortune strike. In the event of something as common as a minor car accident, to something far more serious such as the untimely loss of a loved one, failing to have adequate insurance coverage can have devastating consequences. What many often fail to realize is that certain steps must be taken following a divorce to ensure that you and your loved ones maintain full coverage.
Understandably, while navigating through the chaotic and often all-consuming reality of divorce, certain
contingencies often go unnoticed. Custody, the division of assets, and other more obvious and natural considerations often distract from the less obvious considerations. Namely, something as seemingly mundane yet utterly important as notifying your insurance providers of your change in marital status.
As a general matter, a spouse is typically listed by name on any and all insurance policies. Thus, a failure to inform your insurance providers could result in confusion not only with respect to who the beneficiaries are under your life insurance policy but also who is afforded coverage under either your own or your spouse’s car, health, or homeowners insurance policy.
Whether you have suffered damages as a result of that utterly unavoidable and all too typical fender bender, or require compensation to fix the flood damage to your home after that unexpected rainy California winter, seeking legal guidance is essential to ensuring that you and your loved ones maintain adequate coverage in the face of divorce. Experienced Oceanside Family Law attorneys Fischer & Van Thiel want to help.
Life Insurance Coverage
A divorce decree entered by the Court will not automatically remove your spouse from the life insurance policy. As previously mentioned, your spouse was likely listed by name. Divorce will not automatically void this. Should anything happen to you, the beneficiary on your life insurance policy will still be your spouse long after the dissolution of marriage should you fail to contact your insurance company, inform them of the change in marital status, and select a new beneficiary. Should you remarry, or intend your beneficiary to be someone other than your prior spouse, it is essential that you contact your life insurance provider as soon as possible so to inform them of this change in beneficiary.
Of equal importance, you must protect your ownership rights. Check to see whether you are the owner of any and all life insurance policies. If not, ensure that ownership of the policy is signed over to you prior to the finalization of the divorce, or otherwise seek alternative insurance coverage. Some policies may actually even have some present cash value. As a general matter, the value of your life insurance policy is most certainly an asset, which is yet another source of income to consider when dividing up assets upon divorce.
Understanding the existence and amount of any potential value will be fundamental to a fair and equal division of assets upon separation. This can be a confusing and tedious process which is why consulting with a family law attorney will be extremely important here.
Car and Home Insurance Coverage
You do not want to find yourself financially responsible for damages resulting from an auto accident that your prior spouse was involved in long after separation. While you may have recovered both emotionally and mentally, and ultimately moved on from the dissolution of the marital relationship for quite some time, the last thing that you want is to find yourself liable for damages incurred by your prior spouse. If your name is on the title, or you failed to inform your car insurance company of your marital status, you may very well face this dilemma.
Similarly, should your name remain on the deed of a home where your ex-spouse resides, you may just find yourself having to pay the price when your ex-spouse’s dog gets a bit too aggressive.
Keeping your car and home insurance providers apprised of your marital status is a fundamental consideration when struggling through a divorce.
Health Insurance Coverage
Worried about health insurance coverage? Don’t lose all hope. Thankfully, in California, you may be qualified to receive federal continued health insurance coverage under your spouse’s policy; especially if your spouse works for an employer with over 20 employees. Under COBRA (Consolidated Omnibus Budget Reconciliation Act), you may be able to maintain health insurance following a divorce for up to one and a half years. Should you not qualify for Cobra for one reason or another, there is a very good chance that the children that you had with your spouse will.
An important consideration as a general matter is whether or not you may be able to acquire more affordable healthcare elsewhere. While COBRA may be a good option for some individuals, it is not necessarily right for everyone. Under COBRA, YOU pay the entire premium. However, if you are working and can acquire affordable health coverage of your own, this may be your best bet. Further, it is important to consider that COBRA only lasts or a grand total of three years. Understanding this reality and making sure that you and your family are adequately covered in the long term takes some long term planning and professional legal guidance.
Ultimately, it is essential that you have a plan in place to ensure that you and your family retain adequate coverage and that all insurance coverage whether it be life, health, or car insurance, is planned for far in advance of finalizing your divorce. These considerations can be confusing and deciding which options are right for you can be a difficult task. However, seeking legal help from an experienced family law attorney is the best way to ensure that you and your family are covered and protected following divorce.