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Do I have to divorce my insurance, too?

When reviewing your finances in preparation for a divorce, you'll no doubt remember all the big expenses: mortgage or rent, car payment, child care or education costs, utilities, student loans and even cellphone bills. But you shouldn't overlook one major part of your financial responsibilities: insurance.

Whether you pay it monthly or annually, it probably adds up to more than you realize-and you'll need to make arrangements to revise your policies as you separate from your spouse. That can have advantages-and disadvantages. Let's look at each type of insurance that will change after your divorce. 

Car insurance

Getting an individual policy for your own car shouldn't be difficult, but you'll lose some of the discounts you likely got for being married and insuring multiple cars. Don't automatically stick with your current insurer; do some shopping around to find the best rates. Also, if you have teen drivers at home who are on your joint policy, they'll need to be added as drivers on your new, individual policy. That could be more expensive than you're expecting.

Health insurance

If you're splitting off from being a dependent on your spouse's plan, and are able to get health insurance through work, great - but it not, the cost of your insurance could go way, way up. It could also be unavailable to you, given that the Affordable Care Act (also known as "Obamacare") is being threatened with repeal, without a replacement plan in place. That's a big unknown and could become a major expense going forward. You might want to choose to continue on your ex-spouse's plan with COBRA insurance, but that's also extremely expensive.

Life insurance

Whether you've had one before or not, having a life insurance policy that will directly benefit your ex-spouse and your shared children should be a part of your divorce agreement. It's a safety net, rarely used, but important because the surviving spouse will need the financial support to meet your children's future needs. In effect, it will replace child support.

Homeowners or renters insurance

If one of you is staying in the house, then the homeowner policy will need to be switched to that one person only. Again, this can have an effect on your rates, if you are uncoupling it from your car insurance. If you move into an apartment or a new house, you will be responsible for insuring those properties (or possessions) on your own.

As the saying goes, the devil is in the details. You'll need to carefully track all of these policies and expenses, being careful to factor them into your divorce agreement. You don't want any financial surprises during the difficult time of divorce. There's already more than enough to deal with. Consult an experienced family attorney to assist you with this and other aspects of your divorce, and make sure you cover all the bases.

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