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Important Insurance Considerations for Separated or Divorcing Individuals

When couples separate and begin the process of going through a divorce, with one spouse deciding to leave the marital residence, there are often a myriad of considerations and chores that need to be taken care of, much like whenever anyone moves. The spouse who is moving out needs to concern himself or herself with furnishing the new residence, setting up utilities, and settling into the new life. However, one thing that couples often overlook is the need to potentially change their insurance policies to reflect the new living arrangements.

As an initial consideration, it is important to remember that when an individual files for divorce in New Jersey they are required to certify as to the various insurance (health, auto, homeowners and life) that is in place and are not permitted to amend those policies to provide lesser coverage without consent of the other party or permission of the Court. However, if a spouse leaves the marital residence, the policies may need to be adjusted and/or new policies may need to be obtained.

A typical auto policy contains language wherein in addition to the named insured the "spouse" is covered, but only if a resident of the same household. If the spouse ceases to be a resident of the same household, they will be covered, typically, only until the earlier of 90 days, the end of the policy, or the effective date of a new policy which specifically names the spouse as the named insured. Therefore, with regard to an auto policy, it is important to change the garaging information on the vehicle, the driver's residence information and/or, preferably, to obtain a new policy. If the couple has children who drive, they will want to be certain that the children are properly covered under both policies or, at the very least, on the policy of the parent with whom they are living.

With regards to your homeowner's insurance, the spouse leaving the marital residence will want to get a new policy, even a renter's policy, to ensure proper liability and personal property coverage. The spouse who is leaving will also want to be named as an additional insured on the homeowners policy of the marital residence, as their coverage as "spouse" will have ceased.

Finally, if you and your spouse have umbrella coverage and/or specific item coverage, you will need to ensure that the new reality of your living arrangements is specifically accounted for on the policy.

Once the divorce is finalized, the divorced individuals will typically obtain their own, individual policies. However, it is clear that a lapse in coverage may occur if one waits until a divorce is final to review their various insurance policies.

In addition, once a divorce is final, with regards to life insurance, it is critical that, if the ex-spouse is a named beneficiary on the policy, the policy is amended to reflect the change in the relationship from spouse to ex-spouse, as a life insurance company can deny coverage to the ex-spouse if they are still listed as the spouse on the policy. 

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