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The process of divorce is often stressful and complicated. It requires each spouse to focus on multiple issues, all of which require the parties to make important and long lasting decisions. One issue that is key, but often left to last or forgotten entirely, is how to properly handle the family’s personal property and casualty insurance during the various stages of the divorce. This encompasses coverage for the homes, cars, valuables, collections, boats, and personal excess liability (umbrella).
During the initial stages of the divorce process and at its conclusion, it is critical to have an expert insurance broker review all coverages and make recommendations for changes necessary to protect each spouse in the event of property or liability claims. It is also crucial for a knowledgeable broker to coordinate the coverages, so that there are no gaps, no duplicate coverages, and so that the family is not overpaying or underinsured.
Here are some questions that are relevant during the process of divorce that require advice from a trusted insurance expert:
Q. How does insurance respond when one spouse moves out of the primary home? Is that individual still covered by the liability portion of the homeowners’ policy or the umbrella policy? A. The insurance will need to be rewritten to properly protect each individual and their property.
Q. When children who drive share their time in both households and drive cars belonging to each parent, what is the correct way to handle the auto insurance? A. This can be managed in several different ways depending upon the specific circumstances.
Q. What about the assets that will remain in both names for a period of time and then are phased out to just one name over several years? A. Special attention needs to be paid to the details in this situation. It can be complicated to make sure that the policies properly reflect the change in ownership and that all parties have the right coverage in the event of a claim.
Q. When valuables and fine art collections are divided and moved out of the primary home, how should the policies be adjusted? A. The coverage needs to be correctly rewritten and adjusted to avoid no coverage or duplicate coverage.
Q. When assets, such as property, are placed in a trust for the benefit of the children, how should the policies covering those assets be written? A. This can be managed in several different ways depending on the specific circumstances, but is an area that is often mishandled, or entirely ignored.