How Does Divorce Impact Your Homeowners’ Policy?

by Ryan HanleyNovember 1, 2016

A divorce can raise many questions, particularly when it comes to your homeowners’ insurance. For instance, what happens to your homeowners’ policy if you’re staying in the house during divorce proceedings? Are you still covered under your current homeowners’ policy if you begin to live in a new residence? These are just two of the questions that an individual will need to consider when going through a divorce.

When it comes to homeowners’ insurance, there is no reason to be left in the dark. Fortunately, we’re here to help you understand the impact of divorce on your homeowners’ insurance and why you may need to dedicate time and resources to adjust your homeowners’ policy.
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Ultimately, there are many factors that may dictate the long-term impact of a divorce on your homeowners’ policy, including:

1. The Name on the Policy

Are both a husband’s and wife’s names listed on your homeowners’ policy? If not, many problems could arise.

Typically, the declarations page of a homeowners’ policy defines exactly who and what is covered. If one person is defined as the homeowners’ insurance policy holder, he or she will be solely responsible for making policy changes.

It is always better to err on the side of caution, especially with homeowners’ insurance. As such, it is important to know who is listed on a homeowners’ policy and adjust the agreement based on who will stay in a marital residence after a divorce. By doing so, whomever remains at this residence will remain covered under the homeowners’ policy.

Also, it is essential for an individual who is moving out of a marital residence to remove his or her name from a homeowners’ policy after a divorce, but both names should stay on the policy until the divorce is complete to protect the insurable interest of the party moving out. This individual may want to make arrangements to buy homeowners’ insurance for a new residence as well.

On the other hand, if an individual relocates to an apartment, condo or other short-term housing, he or she may want to purchase a renters’ policy. This coverage will provide personal property, liability, and other coverage if a rental home is damaged or destroyed.

Perhaps most important, all parties listed on a homeowners’ policy must consent to policy changes. This protection ensures that if one party tries to act unilaterally to modify a homeowners’ policy during divorce proceedings, he or she should not be unable to do so.

2. The Property That Needs to Be Insured

In a divorce, belongings may be split among both parties involved in the settlement. Thus, you’ll want to review your current homeowners’ policy to ensure it protects both the structure and contents of your home.

Remember, a home must be insured by the actual property owner. If the owner of the home changes due to a divorce settlement, a homeowners’ policy will need to be modified or rewritten to reflect the change of ownership.

Conducting a home inventory is a great idea if you are going through divorce proceedings. This will enable both parties to determine who owns what and will guarantee all of their personal belongings are protected.

If you receive art, jewelry or other luxury items as part of a divorce settlement, it is paramount to notify your insurer. That way, your insurer will be able to adjust your homeowners’ policy as needed.

3. All Parties Involved

A divorce impacts more than just a married couple; in fact, this occurrence may change how family members are viewed as part of your homeowners’ policy.

Understanding who and what is insured under your homeowners’ policy is crucial. In a divorce, an individual who is not listed on a homeowners’ policy could move into a different classification, which means he or she may no longer be protected under the policy.

Homeowners’ insurance defines children and other residents as individuals who live in your home. It stipulates that these parties are covered by your homeowner policy’s personal property and liability coverage if they are under 21 years of age and under the care of any member of your family.

Conversely, a couple may divide custody of their children in a divorce settlement. This means the couple’s children may spend half of their time at each parent’s respective home. As a result, the new living arrangements may influence how your kids are defined under your homeowners’ insurance, and you will need to update your coverage accordingly.

There is no reason to put your home, personal belongings and other assets at risk during divorce proceedings. Those who keep their agent informed throughout these proceedings will be better equipped to minimize risk and guarantee all of their assets are protected, regardless of how property is divided after a divorce.


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About The Author
Ryan Hanley
Ryan Hanley is the Vice President of Marketing at TrustedChoice.com and the Managing Editor of Agency Nation. He is also a speaker, podcaster and author of the Amazon best-seller, Content Warfare. Ryan has over 10 years of insurance expertise and blogs frequently to help consumers understand complicated insurance topics.

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