Divorce is already a tough enough process to go through, and the added steps and complications related to untangling common ownership of marital assets can be incredibly stressful. It is important to understand how to most effectively and efficiently get these things accomplished, so knowing the basic contours of what this entails can save a lot of nerves and cost.
When it comes to vehicles and car insurance, there are some specific considerations.
Key Takeaways
How Car Insurance May Affect Divorce Considerations in Illinois
It is no surprise that divorce can complicate various aspects of life, and this may (and typically does) extend to car insurance. In Illinois, addressing car insurance during a divorce is crucial for ensuring fair distribution of assets and responsibilities. The following is what to consider when dealing with car insurance in the context of a divorce:
How to Divide Vehicle Ownership
When a couple decides to divorce, one of the first steps is to determine who will retain ownership of shared vehicles. This decision impacts car insurance policies, as the names on the insurance policy should align with the current vehicle ownership. In Illinois, vehicles are typically divided based on marital property laws, meaning that the vehicle’s ownership is determined by equitable distribution principles. If one spouse gets many of the other assets, the other may get the vehicle, for example.
How to Revise Insurance Policies
Once the issue of vehicle ownership is settled, it’s necessary to update car insurance policies. This will include following some steps, such as removing or adding drivers and adjusting coverage.
If a vehicle is awarded to one spouse, that spouse should be the primary driver on the policy, and the other spouse should be removed as a driver from that policy. This ensures accurate coverage and calculation of premiums. If a vehicle is sold or transferred, the policyholder should adjust coverage to reflect any changes. For example, if the new owner is a different individual, the insurance policy needs to be updated to list them as the new primary driver.
How to Splitting Insurance Costs
Insurance costs are typically divided based on the terms of the divorce settlement. The divorcing couple should agree on how to handle the ongoing costs of car insurance for vehicles that are jointly owned or used by both parties. This can include determining who will pay for the premiums or how to manage the costs if the vehicle is shared.
The Difference between Named Insured vs. Additional Drivers
The person named as the one insured on a policy is typically the person who owns the vehicle. When determining who will be the person named as insured after a divorce, it is important to ensure that the policy accurately reflects the new ownership and that both parties understand their respective responsibilities. Additional drivers who were previously covered might need to be reassigned or removed from the policy based on their driving needs and the newly determined vehicle ownership.
The Impact on Premiums
Divorce can impact car insurance premiums in various ways. Changes in marital status can affect rates, as insurance companies often consider marital status when calculating premiums. This may be surprising, but it does happen because if one spouse used to drive the car more frequently than the other, and after their divorce, the other spouse now drives it exclusively, the rates will change based on the one who has the vehicle now. If one spouse assumes ownership of a vehicle and the insurance policy, their rates may change based on their driving record and other factors such as their age and various health factors like vision, among others.
Seeking Legal and Financial Advice
It is always advisable for both parties to seek legal and financial advice to ensure that all aspects of car insurance are handled correctly during a divorce. An attorney can help in drafting or reviewing the divorce settlement to include clear terms about car insurance responsibilities, while a financial advisor can assist in understanding the financial implications of these changes.
Critical Post-Divorce Considerations
After the divorce is finalized, both parties should review their car insurance policies to ensure that they reflect their new situations. This includes updating addresses, adjusting coverage limits if needed, and ensuring that all policies are compliant with Illinois state law.
In Conclusion
Ultimately, addressing car insurance during a divorce in Illinois requires careful consideration of vehicle ownership, insurance policy details, and cost-sharing arrangements. By following these steps and seeking appropriate advice, divorcing couples can effectively manage their car insurance needs and avoid potential disputes in the future. It is one of the many things to have to think about, so it is always advisable to have a professional guide you through the process to ensure a smoother experience. As difficult as divorce can be, it can be managed to minimize the negative aspects.
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