Taking care of insurance coverage during a divorce

Getting ready for divorce involves not only the working through of intense emotional issues that are bound to come up, but also the more pragmatic considerations of property division and, where there are children, custody and parenting time. These strong emotions can cloud details that both sides must consider as they are preparing to split their lives and finances.

One important part of property division that sometimes gets left out is discussions about insurance coverages, and neglecting them can have serious consequences for everyone involved. For residents of Lancaster and throughout South Central Pennsylvania, getting more information on these and other concerns that are likely to come up during the process can help to ensure a measure of security once the divorce is final.

Property division in Pennsylvania

Pennsylvania is an equitable division state, meaning that the court will rule on the division of marital property based on a fair, but not necessarily equal, division of all assets or debt that the couple has acquired during the marriage. When deciding on a fair division, a judge will consider:

• How long the couple was married
• Each spouse’s age, health, sources of income or employment, including insurance and other benefits
• Each spouse’s standard of living
• If one parent will have primary custody

Discussing insurance coverages as part of asset division

At some point, both spouses must be aware of the various insurance policies they hold when completing the inventory of marital property, and decide under whose name some policies will be, as well as who will maintain property, car, or health care premiums.

When discussing current insurance policies and what changes to make, the couple should examine:

• Auto insurance. It is important to discuss who will get which car, and to cover details such as change of address, who is driving each car and the amount or type of driving, as this will affect coverage. Removing an ex-spouse from a policy protects the primary holder from liability if they were to get into an accident.
• Home insurance. There will be a change of address for one or both sides, and considerations may include special coverages for valuables, changes in security, and if one spouse moves to a rental property, they may need renter’s insurance.
• Health insurance. This is a priority, especially if one spouse and children are on the other’s policy. Knowing what other sources such as COBRA benefits are available is essential, as well as deciding what financial sources will pay for these benefits.

Both spouses should also fully understand the cost need for life insurance, disability and long-term care insurance as part of financial planning post-divorce.