Maryland property division: Auto and home insurance policies
We’ve posted before on the topic of how insurance can complicate the property division process of divorce (‘Insurance can add tangle to property division during divorce’, Sept. 21, 2013), but only briefly touched on auto and homeowner’s insurance policies. Once property division is initiated, some Maryland residents may be tempted to simply cancel existing policies when they move out of the marital home. They may believe that it is safe to do so since they are no longer sharing the same house or cars. This could lead to trouble, however.
The fact is that as long as both spouses’ names are on the house, both could be held liable in the event that someone is injured in the home. Maintaining liability insurance while still technically an owner of a particular property can help protect a divorcing spouse from any personal injury claims that might arise. This can be especially important when a divorce is ongoing, since the spouse who maintains the home could conceivably cancel an insurance policy while the other spouse’s name is still on the deed to the house.
When it comes to cars, a couple who is divorcing should also be sure that the appropriate type of auto insurance is maintained. Issues that could come into play include both spouses needing to buy separate insurance policies for their separate vehicles if they were formerly bundled together, and the fact that one or both spouses may wish to have their names removed as an owner of the other’s vehicle. It may also be helpful to note that insurance costs could go up at least slightly in the event that a couple divorces, since they will no longer be able to claim the discounts that often come with being married.
These may just be some of the potential pitfalls that should be considered when it comes to homeowner’s and auto insurance policies. Maryland couples who are going through property division may wish to fully investigate their rights and responsibilities under the law. This can help them make informed decisions as they negotiate any divorce settlements in preparation for moving forward with their single lives.
Source: Fox Business, “How to Uncouple Your Insurance in Divorce,” Michele Lerner, May 31, 2013