How divorce affects auto insurance

Your marital status is a minor rating factor used to calculate your car insurance rates. A married driver pays $50 less per six-month policy than does a single driver, and $48 less than a divorced driver.

Let’s take a look at why this is, how you can save and other important insurance-related topics to consider after divorce.


Unless you live in Hawaii, Michigan or Montana, your auto insurance rates may increase after a divorce. Car insurance companies use historical data showing married drivers are less likely to file a claim. Thus, married drivers are seen as less-risky clients. As a result, married drivers may pay slightly less for car insurance than do divorced or single drivers.

Car Insurance Rates by Marital Status - 2021.png

AVERAGE PREMIUMS AFTER A DIVORCE: BY COMPANY
CarrierAvg. 6 Mo. PremiumAvg. Monthly Premium
Allstate$1,263$211
American Family$908$151
Farmers$1,028$171
GEICO$799$133
Nationwide$876$146
Progressive$822$137
State Farm$652$109
USAA$660$110

Those who don't qualify for USAA should consider State Farm. This data sample reflects pricing for a divorced man driving a Honda Accord. Enter your ZIP code below to see free quotes based specifically on your driving profile.

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How to handle auto insurance after divorce

When it comes down to it, divorce involves splitting assets — car insurance included. Let’s review some things worth considering after a divorce. 

 

Who is the policyholder? Who owns the vehicles?

This is the complicated part. Depending on who you’re insured by and who the policyholder is, i.e., primary insured and the person who created the policy, removing your former spouse from the policy might be a team effort. Because many insurance companies won’t allow you to remove your spouse without their consent — or proof they are no longer living at the listed residence — you might need your former spouse to contact the insurance company.

If you own vehicles jointly, your ability to collect claims payouts could be impacted. The owner of the vehicle is typically listed on the policy, giving them a right to collect claims payouts on the car. Come to an agreement with your former spouse as to who should manage the insurance on your vehicle(s), as well as who should retain the title and registration.

Some companies allow you to “split” policies after a divorce — almost like cutting the policy down the middle. This relatively uncommon perk allows you to stay with the same company and avoid purchasing a new policy elsewhere.

 

Remove your former spouse from the policy and compare auto insurance again

A final — and important — step is to remove your former spouse from your auto insurance policy. Your premium is priced based on many individual rating factors. If those rating factors are negative, your rates will be more expensive. By removing a source of risk, i.e., a second driver, your premium could become more affordable.

If you were removed from the policy, you should acquire new auto insurance as soon as possible. If you’re no longer covered by your former spouse’s insurance and don’t currently have your own, you'll be left without coverage in the event of an accident.


Car insurance for divorced parents

If your kids are not of driving age, you don’t need to worry about their car insurance. But if you have split custody and your kids will be driving both your and your former spouse’s vehicles, you need to make some adjustments.

The easiest way to think about this:if your teen driver uses your vehicle more than 12 times a year, he or she needs to be insured on your policy.

If your former spouse insures your young driver, you will also need to include them on your policy if they use your vehicle. Car insurance follows the vehicle, not the driver. So add them to your policy if they’re a frequent user of your vehicles.

If your circumstances are unique, speak to an insurance agent or a customer service representative.

Learn more about car insurance with kids.


Homeowners and renters insurance

Handling a home can be tricky after a divorce. Setting aside the logistical issues of deciding who remains in the residence, consider what divorce means for your liability insurance. Liability coverage within the realm of homeowners and renters insurance is much different than it is for auto insurance.

Your personal liability coverage covers you in the event you're found liable for damages, someone is injured on your property, your dog bites someone, or if you are found at-fault for damages outside of your home.

If you do decide to move out and your spouse stays in the home, wait to remove your name from the insurance policy. In the event something happens to the home, complications can arise with claims checks and corresponding information if you’re no longer listed on the policy. It’s best to leave your name on the home insurance policy until residency details are ironed out.

If you’re keeping your residence

If you’re the one who will be remaining in your previously shared home, confirm the homeowners or renters policy is in your name — not yours and your former spouse’s. In the event of a claims payout, the check will usually say both of your names. This could cause complications when you try to cash or deposit the check.

If you’re selling your residence

If you decide to sell the home because no one will be living in it, simply cancel the policy once the home is in the hands of the new owner and you have established a new policy. Remember, your homeowners or renters insurance acts as protection for your belongings and your liability. So canceling your policy before you have a replacement leaves you vulnerable if you’re found at fault for an accident.

If you're moving out

If you're moving out of the residence and your former spouse is staying at the previous residence, take the initiative to remove yourself from the former policy once you have a new one. It's important to complete this step: any claims that your former spouse might file would impact your insurance record if you remain on the policy.

 


 

Related resources

If you’re looking for more information related to car insurance and marital status, see the below articles.

Ross Martin LinkedIn

As a licensed insurance agent, Ross is responsible for researching and writing about all matters related to insurance. He has a background in writing and education, as well as a master's degree from Royal Holloway, University of London. He has been quoted by CNET, iDriveSafely.com and Kin Insurance.