How Will My Divorce Affect My Auto Insurance Premium?

​When couples go through a divorce, the last thing on anyone's mind is auto insurance. That's understandably so. Children, living arrangements and other things are far more important considerations. But sooner or later, bills become due (utilities, car payments, etc) and things need to be addressed. And, of course, that includes auto insurance. This article help you avoid the mistakes that most people make on their auto insurance while going through this. It will also make you aware of how things will change now that you're going your separate ways.


      Sadly, I've seen many of my own insurance clients split up. I'm grateful that I'm not a divorce lawyer in that regard.  But I see the same common mistakes made by people going through the divorce process when it comes to handling their auto insurance.


     I know this is a very sensitive issue that ranges along a broad spectrum..... Some couples can be very civil about their divorce, while other breakups can be nasty where there's no communication. Sometimes a spouse plans to leave in advance.... Other times, a spouse might have to leave asap.

 Whichever end of the spectrum your situation falls in, this article will at least help you get your auto insurance in order as best that can be expected. Whether you get along civilly with your soon to be EX or not get along at all, here are some things you need to know either way.......




     Until a divorce is final, both sides are better off staying with their current auto insurance policy as a married couple, as far as price is concerned. That's because by splitting coverage into two separate policies, it almost always cost more.... Sometimes a lot more, you can lose many significant discounts:

• Homeowners discount - Auto insurance companies vary, but all companies give a significant discount to homeowners. Each company is different. The discount can be as low as 10% or as high as 40%.... But for most companies, the range is between 15-25%..... That's quite a big savings that at least one side (or both) will have to give up.

• Multi vehicle discount - When couples split up, their vehicles normally split up as well. For those who drop down to only insuring one vehicle, they will lose this discount if they had it prior to separating. Again, this discount can be quite significant as well, depending on the company.

• Credit rating - Couples going through a divorce more often than not suffer a hit on their credit rating. Credit scores affect auto insurance rates differently from one company to the next. Ranging from a huge difference in premium to no change in premium at all.... But 92% of all auto insurance companies use credit as a rating factor at least to some degree.

• Going from married to single/separated/divorced - For any driver, when it comes to auto insurance rates with all other factors being equal, a married person pays less than someone who is single/divorced/separated. That migh sound silly to you. But statistics show that married people are less likely to be in an accident. So insurance companies rate accordingly.

• Proof of prior insurance - Many unknowingly let their policy lapse because of lack of communication. One side assumes the other side is still paying the premium, and the policy ends up lapsing. Not only can this cause you to lose all or part of your prior insurance discount, but it can also put you at risk of unknowingly driving without insurance. I've seen it happen many times. So obtain all the auto insurance documents you can (e.g. policy number, dates of coverage, levels of coverage, and a customer service number to keep dibs on your policy).

 Summary:


      You have enough to worry about going through a divorce. If you and your soon to be EX can work it out to keep your policy going until the divorce is final, you both are almost always better off. But whether or not that is possible, it's important to stay on top of things with your auto insurance coverage.


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