No divorce is easy and there are no “winners” in a divorce settlement. Even though a divorce may be regarded as “amicable” there are many disputes which may still need to be settled in future. The financial impact is often underestimated by both parties to the divorce and so too the impact on insurance.
Spouses must be advised not to rush into signing any documentation just to “get it over” –but rather to take the time to consider any financial implications. Much agony, blame and unhappiness can be avoided by rather approaching the experts for advice. Divorce has an impact on life and health insurance as well – but in this post we would like to reflect briefly on short term insurance.
Upon divorce, the responsibility and expense of maintaining appropriate policies through payment of premiums must be taken into account. Payment of premiums on such policies can be part of the divorce settlement.
A good friend is at present going through a divorce and told me that her husband has taken her beloved violin off his insurance cover. This is only one example of the caution required during a divorce in insuring that all that needs to be covered remains covered.
Thought should be given to more than just “who gets what” –but also what the costs would be to insure those assets.
It is always important to consider your insurance cover during changes in personal circumstances. These changes in personal circumstances may be a change in employment, a change in location and a change in marital status is most certainly one of the most important factors to consider.
There are many factors to consider and both spouses need to ask specific questions:
- How are our assets covered by our insurance policy?
- Who pays the insurance and how will a divorce change this?
- How does our marital dispensation impact on our divorce and our insurance cover?
- How can we best ensure that cover continues after the divorce?
- How will young drivers and the agreement with regards to car insurance for minor children impact on the insurance cover for these children?
- What will the impact be on insurance if the spouses split and find separate accommodation in new areas?
- What is the impact on divorce on a claims free history and possible claims free bonuses? There will be new insurance contracts starting from scratch…
It is important to consider that car insurance for teens is very expensive and something which parents might need to consider. Parents may need to focus on this as part of the maintenance order.
Spouses would be well advised to carefully consider distinct provisions concerning all insurance policies on an itemized basis, policy by policy. This could minimize the confusion that may otherwise result once the divorce is final. This may also spare the parties later negotiations at times when it may be even more difficult (for practical as well as emotional reasons) to negotiate their differences.
These provisions in a divorce settlement/ agreement must clearly reflect the intent of the parties and must be easily understood by third parties.
Everyone going through a divorce should contact their attorney to ensure that insurance needs and obligations are well addressed during any discussions leading to the divorce settlement. I had a quick chat with divorce lawyer Bertus Preller from http://www.divorceattorney.co.za and he has identified several areas to consider during the divorce settlement. We will seek to discuss some of these in more detail in the next few months.