The breakup of your marriage involves separating not only physically, but also financially. When your single economic unit suddenly becomes two, you may be tempted to save money by kicking your ex off your auto insurance. Unlike with health insurance, making changes to auto plans is generally easy. Before you do this, though, take a moment to consider how auto insurance can affect you in your divorce.
Auto Insurance and Vehicles In Your Name
The specifics of civil liability in car accidents vary from state to state, but in general, the owner of a motor vehicle can be held liable for personal injuries suffered in a car wreck even if he wasn't driving the car. This has important implications for your divorce case if your ex is driving a car that is in your name or both names. If you drop insurance on the car or trust her to get her own insurance and she lets it lapse, you could be left holding the bag if she hits somebody in a car that has your name on the title.
Auto Insurance And Vehicles In The Other Side's Name
Your risk of loss becomes far lower when your ex isn't driving a car with your name on it. Generally, you want to get your name off his vehicle as soon as possible after separation. But, depending on your state, even this may not protect you entirely. If your ex drives his own car without insurance and injures somebody in an accident, that unpaid judgment could attach to the former marital residence or other marital assets. This could translate into a reduced value of your total marital estate. While a post-separation wreck should be his problem, as a practical matter it becomes yours if his judgment creditors have taken assets that you should have received in the property division case.
Auto Insurance As Support
In order to get the most bang for your buck, you could agree to continue paying for your ex's auto insurance for a period of time in the marital settlement agreement or consent order. The idea here is, instead of paying alimony or child support directly, the other side agrees for you to split some and pay it directly to her insurer. This way, she doesn't have to use her own money to buy auto insurance and you can rest easy knowing the policy is paid. While this might not be an acceptable arrangement indefinitely, it can be useful until the car titles are switched and all assets divided.
If You've Already Dropped Your Ex From Your Auto Insurance
You might sustain no ill effects from kicking your ex off your car insurance even if the vehicle has your name on it. If you're comfortable with the risk of getting stuck paying for a wreck your ex caused and there exists no agreement or court order requiring you to keep the insurance, you may decide to spend your money elsewhere. Realize, though, that you might end up losing everything you saved on auto insurance--and more.
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