Whether you’re on good or bad terms, getting divorced can be rough. It can be stressful, time-consuming, and confusing with all of the paperwork that goes into it. Chances are that both of your names are listed as shared parties on a lot of documents, including your insurance policies. So, how do you divide everything up insurance-wise? Here’s what you need to know about home insurance if you’re getting divorced.
How does getting divorced affect my insurance?
It all depends on what your specific situation is and what you want to do with your insurance if you’re getting divorced. On a broad level, you’re going to have three options: you can cancel your joint policy, you can take a person off of your shared policy, or, if you’re ordered to stay in the same dwelling, you can keep the coverage the way it is. However, there are a few different things that you’ll have to do to for each scenario.
Can I take someone off of my home insurance policy if I’m getting divorced?
If you’re both listed on the home insurance policy, and you’re trying to remove someone from the insurance, the removal of a party is going to depend on who is trying to take off which person. If you’re the primary policyholder, you can remove your ex-spouse from your policy by giving your insurance carrier a copy of your divorce decree. If you’re not sure who the primary policyholder is, it’s usually the person that called in to set up the policy (even if you’ve both signed the deed, loan, or policy).
To put it into perspective, let’s look at Bob and Jill, who are getting divorced. If Bob was the one who called their insurance company to set up the homeowners’ policy, he would be the one listed as the primary policyholder even if he listed Jill under the policy. Even if they both went into the office to set up their home insurance, they may have had to agree to put Bob’s name as the policyholder.
Therefore, Bob would have the power to give their insurance company a copy of their divorce decree and ask to have Jill taken off of the policy. Depending on the carrier, they may ask for consent from Jill to authorize the change. However, with some carriers, Jill’s consent is not necessary.
Pro Tip #1: To determine who ultimately has authority over your home insurance policy, they’re going to look for the singular name that’s either on the house deed, the house loan, or the policy itself. So, it’s always important to know whose name is on what type of paperwork.
If you’re in Jill’s situation and you run into issues with this arrangement, you may be able to argue that you have more “insurable interest” in the property than who the insurance carrier has noted as the policyholder.
What is insurable interest?
When talking about home insurance, your carrier is going to want to work with the person who has more of a stake in the property and who is more likely to take care of the home. So, the person who has insurable interest in the property is usually the person that has invested the most in the property. For example, if your spouse moved into the house you bought only after getting married, you would have more insurable interest because you’ve made more payments on the home.
Someone could also have insurable interest if they will still be living in the home after the divorce, but they’re not the policyholder.
For example, let’s revisit Bob and Jill. Jill has primary custody of their children and doesn’t want to uproot them. However, Bob is still the policy or deed holder. If they work out a situation where Jill keeps the house and Bob moves out, then Jill would have more insurable interest in the property because she and the children are still living in the home.
In this situation, both parties would have to provide their insurance carrier with written consent that Jill is now the main person using the policy. It’s an easier way to handle keeping the policy on the house without simply canceling the joint policy and forcing Jill to get entirely new homeowners insurance.
You may be wondering: If you’re the main policyholder for your home insurance and you want to transfer ownership to the other person listed, couldn’t you just remove yourself from the policy? The short answer is no. If you remove your name from the home insurance policy, the plan would not automatically be transferred to the other party listed.
If you tried to remove yourself, the policy would, in theory, simply not have a primary policyholder. In that case, your insurance company may tell you to just prove insurable interest for the other party or cancel the policy completely. However, doing the latter may be more difficult in the long run.
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If I’m getting divorced, can I cancel my home insurance policy?
If you do want to completely cancel your joint home policy, it will still have to have to be a group effort. Your insurance agent can only cancel your homeowners’ policy completely if they have consent, in writing, from both of you. This method will probably work best if you are both leaving the house and going your separate ways.
Canceling your policy can get a little tricky if you two don’t talk to each other anymore, even if you’re the policyholder. Your insurance company cannot cancel your policy entirely with just your divorce decree. A carrier also can’t take the word of just one person on the policy (whether they’re the primary policyholder or not).
However, today’s technology has created ways to send and obtain information without meeting face to face. If you have trouble getting a signed letter from your ex-spouse, your insurance company may accept an authorization email from their email account stating that you have authority to make changes to your home insurance. You may also be able to ask the insurance company to contact your ex on your behalf to get the process over with.
For example, let’s revisit Bob and Jill. Let’s say that they’re both moving out of the house that they bought together. Bob is still the primary policyholder. However, Jill is handling the cancellation of their home insurance policy, and she can’t get ahold of Bob or she has limited contact with him.
To get his consent to handle the rest of the cancellation, she can ask Bob to send an email to their insurance company stating that Jill has full permission to make changes to the account. If that doesn’t work, Jill may be able to ask their carrier if the company can reach out to him with the information they have on file. It allows Bob to hear from a neutral party and one that can explain exactly why they need certain information from him.
What if I’m not the primary policyholder of my home insurance policy?
If you’re not listed as the primary policyholder, and you don’t have majority insurable interest in the property, the authority you’ll have over the home insurance is pretty limited. The only major options you’ll have if you are not the policyholder are to prove that you have insurable interest, remove yourself from the policy, or arrange to be the responsible party for the insurance payments.
How do I remove my name from my homeowner’s insurance if I’m getting divorced?
If you want to take yourself off of the home insurance policy and just get a new, singular policy, you should be able to contact your insurance company and simply ask to be taken off. Your carrier may ask for a copy of your divorce decree, but typically taking yourself off of the homeowners’ policy isn’t a hassle because you’re only speaking on behalf of yourself.
Pro Tip #2: ALWAYS get a copy of your divorce decree in case your insurance company needs to reference it.
Can I just transfer ownership of the policy to my name if I’m not the primary policy owner?
If you’re not the primary policyholder, you won’t be able to make that kind of change on your own. However, you may be able to set up a situation where your ex’s name stays on the policy and the insurance company holds you responsible for the payments.
Overall, there are a lot of legal issues that insurance companies have to abide by when it comes to divorce. So, there are a fair number of factors that your agent can’t control when dividing up your homeowners’ insurance.
However, our insurance experts are pros at working with you and your situation to make the transition as smooth as possible. Call us today to go over your insurance options if you’re going through a divorce. And if you’re looking for a new home insurance policy, fill out our online form or connect with an agent through live chat. We’re here to help!