Divorce is a difficult process for all involved—one that requires jumping many hurdles to separate your money, property, and yes, even insurance. Whether you’re considering divorce, currently separating, or about to complete a divorce, it’s worth some effort to delve into how car insurance works both during and after a divorce.
Many of the logistics depend on your state of residence and your insurance company. So don’t assume you already know how car insurance after divorce works, or base your expectations on a friend’s experience. Deciding when and how to split off policies isn’t a cut-and-dried situation.
When Can You Remove Your Ex-Spouse From Your Car insurance?
You can remove your spouse from your car insurance even while you’re separated, said Jill Roth, executive vice president of Virginia insurance company Ahart, Frinzi & Smith.
"Each divorce is different from the next," Roth said. For example, some couples want to separate their finances as quickly as possible during the separation, despite living in the same home. Others stay on the same joint car insurance policy even after one has moved out.
On your insurance documents, both spouses are likely listed as named insureds. A named insured individual can't remove another named insured without written permission, Roth said. So even if you want to remove your ex from your policy, you can't do it on your own—you must get their agreement in writing. In some states, you may also be restricted from changing your coverage while going through a divorce.
However, the insurance company typically won't require you to remove your ex-spouse until the divorce is finalized. And even then, it may be possible to stay on the same policy, Roth said. “Different underwriting standards will give you different answers to your questions.”
For example, if your policy runs from July 1, 2021, to July 1, 2022, and your divorce is finalized in October, you both may be able to stay on the same policy until its end date, she said. It's up to your insurance company whether this is allowed.
Does One Ex-Spouse Need a New Car Insurance Policy?
When the divorce occurs, Roth said, “the standard approach is to endorse the current policy to show only one of the insureds [and their vehicle] and take out a separate policy for the other spouse.”
For example, if Mark and Jane get divorced, Mark and his car are removed from the shared insurance policy. The existing policy now covers only Jane and her car, and Mark gets a new policy.
However, some carriers may simply cancel the existing policy and issue new policies to both spouses. Before making any changes, it’s important to speak with an insurance agent to get advice about your specific situation.
How Does Divorce Impact Car Insurance Pricing?
Whether your policy is split off or you stay on the existing policy, your annual rate could go up or down based on your driving record, claims history, discounts for multiple drivers or vehicles, and your credit history (in some states). If your ex-spouse had a few accidents on their record, they could have been pulling down your score, so your premium could decrease. But if you’ve had claims but your ex didn’t, you may be the one facing higher rates. And if you no longer qualify for discounts for having multiple policies or paying in full, you may pay more for your car insurance.
Many financial factors are in flux during a divorce, Roth said. For example, refinancing a house or buying a car can impact your insurance score, a unique score each insurer maintains based on their rating systems. However, each proprietary rating system is different, so some factors may have a bigger effect on one company’s policies than another’s.
Steps to Separating Your Car Insurance After a Divorce
Separating your car insurance after a divorce takes some planning and research before the divorce is finalized.
Call Your Insurance Agent
When you know your separation or divorce date, contact your agent or insurance company in advance. Find out how your current insurer deals with cars, addresses, separation, and divorce, and start to research new auto insurance options with your post-divorce information, such as a new ZIP code.
Moving to a new address does not necessarily mean you must immediately separate insurance policies, Roth said. However, some insurance companies may insist on separate policies as soon as you live in separate residences.
If one of you has moved out of your previously shared home, you’ll need to update the garaging address for the moved vehicle if it will stay on the same policy, or take out separate policies for each spouse. Talk to your agent about your situation.
Sort Out Vehicle Titles
If vehicles were previously titled in both spouses’ names, the cars are often retitled to be in only one person's name. Contact your insurance agent and your state DMV office to determine the correct process. You may also need to update state registration and title records if you’re changing your last name due to the divorce.
Typically, agents like to separate insurance policies as close to the DMV retitling appointment date as possible, Roth said.
Submit a Signed Removal Request
Finally, you will have your own policy for a car titled in your name. Ensure your new policy is in place before removing yourself from the previous policy. You will usually need to sign a removal request.
Make Sure Your Teen Is Covered
In most situations, all household members with a driver's license must be listed as drivers on the insurance policy. However, where teens of divorced parents are concerned, it may be possible to add a teen to only one parent's insurance, even if custody is shared 50-50. Roth notes that the primary address listed on the teen's license generally indicates the policy that will cover the teen, but it’s a good idea to check with your agent.
Decisions regarding your teen’s insurance might need to be decided during the divorce process and added to the divorce decree. If you’re considering adding a teen to your insurance, be sure to review our list of the best car insurance for teens and young drivers.
Frequently Asked Questions (FAQs)
Can I stay on my ex-spouse’s car insurance after a divorce?
You may be able to do so until the renewal date, depending on your insurance company. However, you'll want to find out if this is allowed before your divorce is finalized, and make sure your new policy is in place before allowing the previous policy to expire.
How long can a divorced spouse stay on car insurance?
According to Roth, some insurers may allow you to stay on a joint policy until the policy renewal date. Doing so may save you money. However, other insurers will expect couples to get separate policies when their divorce is finalized.
Why did my car insurance go up after a divorce?
In most cases, there are different rating categories for an insured person: single, married, divorced/separated, and widowed. Roth said those who are married, engaged, or living in a committed, long-term relationship may save up to 20% on their insurance. You’ll lose that discount when divorcing.
Insurance rates for people moving from “married” to “divorced or single” may increase by 0% to 34%, according to research from the Consumer Federation of America. The potential increase makes this a good time to shop around to find the best coverage and rate for your needs.