Car Insurance after Divorce: Guide on How it work & its affect

By Randy Luton | Last Updated: 12/27/2023

Divorce is a significant event that can have profound effects on various aspects of a person’s life, both emotionally and financially. The impact of divorce can vary widely depending on individual circumstances. It can also affect car insurance in several ways. In this blog, we will explore car insurance after divorce, providing you with the information you need to make informed decisions and ensure your coverage remains intact.

Does being Divorced affect your car insurance?

Your marital status can indeed impact your car insurance rates. When you’re married, insurers often view you as a more stable and responsible driver, which can lead to lower premiums. However, after a divorce, this dynamic can change. Insurance companies may see you as a single policyholder, potentially resulting in higher rates.

It’s important to remember that while your marital status is a factor, it’s just one of many that insurers consider. Your driving record, location, the type of vehicle you drive, and other variables also play a crucial role in determining your premiums.

How Divorce can impact your auto insurance?

It is important to keep the following factors in mind:

  • Change in Living Situation: After a divorce, individuals often experience changes in their living arrangements. If one spouse moves to a new location, it can affect car insurance rates, as the location of residence is a key factor in determining premiums.
  • Ownership of Vehicles:The division of assets in a divorce may involve decisions about who retains ownership of shared vehicles. The person keeping the vehicle will typically be responsible for its insurance.
  • Policy Adjustments: It’s crucial to review and adjust insurance policies after a divorce. If both spouses were previously covered under a joint car insurance policy, they may need to obtain individual policies based on their new circumstances.
  • Driving Records: Each spouse’s driving record can impact auto insurance rates. If one party has a history of accidents or traffic violations, it may result in higher premiums for the individual seeking insurance coverage.
  • Multi-Policy Discounts: During a divorce, individuals may need to reevaluate their insurance needs. While separating from a joint policy, they might consider bundling car insurance with other policies (such as homeowners or renters insurance) to take advantage of multi-policy discounts.
  • Financial Changes: The financial implications of divorce, including changes in income and assets, can influence insurance decisions. It’s important to choose coverage that aligns with the new financial situation post-divorce.
  • Notification Requirements: Insurance companies may require notification of changes in marital status. Failure to update this information could lead to complications in the event of a claim.
  • Teenage Drivers: If there are teenage children involved in the divorce, custody arrangements may impact insurance. The parent with primary custody may be responsible for insuring the teenage driver, affecting premium rates.

What happens to car insurance after Divorce?

When a divorce occurs, the insurance policies of both spouses typically undergo changes. If you and your ex-spouse had a joint car insurance policy, you’ll need to decide how to proceed. Options may include:

  • Removing Your Ex-Spouse: If your ex-spouse is no longer using your vehicle, it’s best to remove your spouse from your policy to avoid potential complications.
  • Switching to Individual Policies: In many cases, each spouse will need to obtain separate car insurance policies. This allows each person to maintain coverage tailored to their unique needs.

Why did my car insurance go up after my Divorce?

Several reasons can explain an increase in car insurance rates post-divorce. Primarily, the loss of multi-policy discounts that often accompany married life can result in higher premiums. Additionally, if your ex-spouse had a poor driving record, their removal from your policy might lead to rate hikes, as their risky behavior is no longer factored into the equation.

After a divorce, your car insurance rates might go up, except in Hawaii, Michigan, or Montana. Insurance companies believe married people file fewer claims, so they pay less. If you’re divorced or single, you could end up paying a bit more for car insurance in most states because insurers see you as a slightly higher risk.

What factors should be considered when selecting a new policy?

  • Select the Policy: Choosing the right car insurance policy post-divorce requires careful consideration. Here are some factors to keep in mind:
  • Coverage Needs: Evaluate how much coverage you need based on your individual circumstances. Consider factors like your vehicle’s value and your personal financial situation.
  • Deductibles: Take your budget into consideration when choosing a deductible. A higher deductible typically results in lower premiums, but it means you’ll pay more out of pocket in the event of a claim.
  • Discounts: Look for discounts you may qualify for, such as safe driver discounts or multi-policy discounts if you bundle insurance policies.

How long after Divorce is final do you have to notify the auto insurance company?

The timing for notifying your auto insurance company after a divorce can vary by insurer. However, it’s generally advisable to inform them as soon as possible to prevent any coverage gaps or complications. Some companies may require notification within 30 days of the divorce being finalized.

How do i maintain my insurance after Divorce?

Maintaining your car insurance after divorce is essential to ensure you’re protected on the road. Here are some steps to consider:

  • Update Your Information: Notify your insurance provider of your change in marital status. They need accurate information to adjust your policy accordingly.
  • Evaluate Your Coverage: Assess your insurance needs independently.Taking into account your driving habits, financial situation, and vehicle value is important. Adjust your coverage to align with your new circumstances.
  • Shop Around: Don’t be complacent with your current insurer. After a divorce, it’s an ideal time to shop around for competitive rates. Different companies may offer better deals based on your updated information.

In conclusion, while divorce can introduce complexities into your life, managing your car insurance need not be daunting. Stay proactive, update your information, evaluate your coverage, and shop around to ensure you get the best deal on your car insurance post-divorce. By taking these steps, you can navigate the transition smoothly and maintain the protection you need on the road.

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Editorial Guidelines: The above is meant as general information to help you understand the different aspects of auto insurance. This information does not refer to any specific auto insurance policy. Coverages and other features vary between insurers, vary by state, and are not available in all states. References to costs of coverages/repair, average or typical premiums, amounts of losses, deductibles, etc., are indicative and may not apply to your situation. We encourage you to speak to our insurance representative and to read your policy contract to fully understand your coverages.

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Randy Luton is the Founder and CEO of RateForce. He is passionate about InsurTech services and has in-depth knowledge about the auto insurance sector of the USA.