When a marriage ends, it can be stressful, complicated, and maybe even a little scary. It’s not usually part of the plan when you first tie the knot, but it can happen for better or worse. One thing that getting divorced will affect is how much you pay for auto insurance.
Your marital status is a factor that insurers include in their pricing algorithms. Married couples typically pay less. The reason for this is that, on average, drivers joined in wedlock avoid getting in as many accidents or filing as many claims as single people.
So, what happens after a divorce? This article will answer that and more. We’ll explain what’ll happen to your rates and what to do with your policy afterward. We’ll also talk about how to handle teen driver’s in the middle of marital dissolution. Finally, we’ll answer some frequently asked questions about auto insurance after you separate from your significant other.
How Divorce Affects Insurance Rates
Your auto rates are likely to increase following a permanent separation. This is because single people tend to pay a little more for insurance than married couples. Per a report by the Consumer Federation of America (CFA), rates from top insurers are usually much higher for single or divorced drivers.
While it seems unfair, single people typically pay more because insurance companies believe that married drivers are more responsible behind the wheel. Insurers decide this by analyzing extensive amounts of data on which types of people file claims. The following states, however, don’t allow insurers to change your rates based on marital status:
- California*
- Hawaii
- Michigan
- Montana
*As part of Proposition 103, passed in 1988, California only allows insurers to use your marital status to determine your rates after they’ve used other required factors first. bIt’s important to note that many factors ultimately affect your premium. While your rates can go up for becoming single again, that’s not always the case. Many other things can affect your them in an even bigger way, such as:
Your rates may even stay the same or go down if you have a good driving or claims history. Since married couples typically have a joint insurance policy, your prices also reflect the other person. For example, if they had a bad driver record, but you didn’t, and you get divorced, you could see a decrease in rates.
Coverage Options After Divorce
A marriage ending is an especially difficult and stressful time. There are many loose ends to tie up, and insurance just happens to be one of them. Below are a few steps you may have to take with your auto coverage if you’re newly divorced:
Get an Individual Policy
The first thing you’ll likely have to do is cancel your joint policy (if you have one) and get an individual one. This will help give you more clarity on how much you’ll pay for your car insurance going forward.
You’ll want your own policy if you plan on living at a separate address from your former spouse. Otherwise, if you stay at the same address, you may be able to remain on the original policy as though you were a roommate or relative.
Getting a personal policy after a divorce will also help you avoid increased rates or legal issues if your ex-spouse gets into an accident. If they stayed on your insurance, your policy would get expensive if they got into a severe accident or received many traffic tickets.
Report Any Vehicle Ownership Changes
One of the most complicated parts of terminating a marriage is dividing up personal assets, such as money, homes, and cars. This can affect your auto insurance. There’s a chance you may have to give up one of your vehicles. Or you may get a new one. You’ll have to tell your provider if there are any changes in vehicle ownership. That’ll ensure that the new car either appears on your new policy or is off of it if you no longer own it.
Change of Address
You’ll also need to take care of any changes in the address on the vehicle’s registration and with your insurance provider if you’re the new owner. Moving could affect your premium, either by lowering it or raising it if you live in a place known for lots of traffic and accidents.
Other Changes Worth Mentioning
It’s also a good idea to let your insurer know if there’ll be any changes to how often you’ll drive your new car. This could lead to changes in rates or could even help you qualify for a discount.
Take Care of Other Drivers or Children on Your Policy
Another step you may need to take after a divorce is re-assigning other drivers on your policy. The most common example of this is with relatives, such as teens, you and your former spouse used to have on your joint policy. You’ll need to make sure you assign them to the correct policy, especially if they’re a child.
Both parents may even need to include the child on their policy. This is usually the case if the teen will end up using both parents’ vehicles frequently. This is because insurance follows cars, not people. Young drivers must have proper coverage for every vehicle they use. Be sure to contact your insurer for more information on how to correctly insure teens after a divorce.
Frequently Asked Questions
Can I stay on my former spouse’s policy after divorce?
Yes, you can stay on your former spouse’s car insurance after getting divorced. But that’s usually not the ideal situation for most people. You can only stay on your former spouse’s policy if you live at the same address and use the same cars. You’ll need a new policy if you live elsewhere.
Sharing a policy after a divorce can also lead to stressful legal issues or higher rates. Keep in mind that you’re at the mercy of the other person’s actions. If they get into a severe accident or have a bad driving record, your rates could go up. Even if you’re always a safe driver.
Why does being divorced affect your car insurance rates?
Getting a divorce can affect your monthly auto rates because single people tend to pay more on average for coverage than married couples do. This isn’t always the case, though. Some companies may not raise your rates for being single, and other factors, such as your ZIP code and the type of car you drive, can help your rates stay low.
Is auto insurance more expensive if you’re divorced?
Car insurance can be more expensive after a divorce since single people usually pay more. But this often relies on many factors such as the company you have, how often you drive, your driving record, and more. You could end up paying very little if your record is clean. If you have more tickets and accidents than your ex, however, expect to pay a lot. Remember, you can always try to find cheaper prices by comparing companies.
Is it better to say “single” or “divorced” for car insurance?
Generally, it doesn’t matter whether you say you’re single or divorced. This is because both pretty much mean the same thing in terms of marital status. Insurers won’t penalize you just because you’re no longer married, they just happen to usually raise prices for single people.
