TL;DR: Divorce can impact your car insurance in Illinois by requiring each spouse to obtain their own separate policy after moving to different residences. Auto insurance policies are tied to the household, so once you and your ex-spouse establish separate homes, you will need individual insurance coverage.
Failing to update your policy could lead to coverage gaps and legal issues. For help navigating this change, call Insure on the Spot at 773-202-5060 for expert advice on how to protect yourself during and after your divorce.
Can You Stay on the Same Car Insurance Policy During a Divorce?
During the divorce process, if you and your spouse are still living together, many insurance companies will allow you to remain on the same auto policy. As long as both cars are kept at the same address, it’s fine to share the policy temporarily. This setup can help you maintain vehicle sharing and keep any multi-car discounts intact until your divorce is finalized.
However, once one spouse moves out to a different address, you will generally need to obtain separate policies.
Auto insurance is based on your vehicle’s primary location, so if you no longer share the same address, each car should be insured under a policy that corresponds with its owner’s new residence. There is no grace period for this change in Illinois—once you have separate households, you need separate car insurance.
Why Do You Need Separate Car Insurance After a Divorce?
After a divorce, it’s essential to have separate car insurance policies to protect both parties legally and financially. Here’s why:
Different Households
Insurance is tied to your household, and once you and your ex-spouse no longer share the same address, you cannot continue sharing the same policy. Each person needs a separate policy reflecting the address where the car is primarily garaged.
Vehicle Ownership
Post-divorce, one spouse typically keeps certain vehicles. It’s important to update the vehicle titles and insurance accordingly. The car title should reflect the new owner, and the insurance policy should be in their name. If both spouses are still listed as owners, you could be liable if your ex gets into an accident.
Liability Protection
By having separate policies, you limit liability. As long as you’re listed on a shared policy, you may be held liable for accidents caused by your ex-spouse. Separate policies ensure you’re not financially responsible for each other’s driving mistakes.
Financial Independence
Your insurance needs will change after divorce. You may need to adjust your coverage based on your new financial situation, whether that means dropping optional coverages to save money or increasing coverage to protect new assets. Having a separate policy allows you to tailor your insurance to your needs.
How Do You Update Your Car Insurance After a Divorce?
When it’s time to separate your joint auto insurance policy, follow these steps to ensure a smooth transition:
1. Transfer Vehicle Titles and Ownership
First, clarify who owns which vehicles. Once that’s decided, update the titles for each car to reflect sole ownership by one spouse.
In Illinois, this involves transferring the title and registering the car at the DMV under the new owner’s name. Once a car is solely in one name, it should be insured under that person’s new policy.
2. Obtain Separate Insurance Policies for Each Spouse
Each spouse should secure their own insurance policy for the vehicle they now own. If you’re happy with your current insurer, you can stay with them, or you can shop around for a better rate. Work with your insurer to split the existing policy into two separate policies, making sure both are active to avoid a coverage gap.
3. Remove Your Ex-Spouse and Update Policy Details
Once your individual policies are in place, contact your insurer to officially remove your ex from the old policy. Ensure all driver and vehicle details are updated. This includes your address, marital status, and the vehicles each person owns. Be proactive about making these changes so that neither of you is left uninsured.
4. Review Your Coverage and Beneficiaries
This is a good opportunity to review your coverage. With your new financial circumstances, you might need to adjust your limits, deductibles, or add additional coverage (e.g., for a new car). Make sure your policy reflects your needs and update any beneficiaries if necessary.
Will Your Car Insurance Rates Change After a Divorce?
While marital status alone doesn’t drastically affect your insurance rates, there could be some indirect impacts:
Loss of Multi-Car or Multi-Policy Discounts
If you and your ex previously insured two cars together, losing the multi-car discount could increase your premiums. The same goes for any bundled policies (e.g., car and homeowners insurance).
Different Driver Profiles
Your premium will now be based solely on your own driving record and financial profile. If your ex had a poor driving record, your rate might go down once they are no longer on the policy. Conversely, if your ex had a clean record and you had a few blemishes, your premium might rise slightly.
Credit Score Changes
Divorce can affect your finances and, in some cases, your credit score. Since insurers in Illinois use credit-based insurance scores, a drop in credit could lead to higher premiums. However, keeping a clean credit history will help keep your premiums down.
Address Change
Your new address can also affect your premium. Moving to a different neighborhood, especially a high-risk area, might increase your rates due to higher theft or accident rates. Conversely, a move to a safer area might lower your premium.
How Are Teen Drivers Covered After a Divorce?
If you have teenage children who drive, it’s important to ensure they remain properly insured after a divorce:
Primary Residence
Typically, the teen should be listed on the insurance policy of the parent with whom they primarily live. If the teen splits time between both parents’ homes, they may need to be listed on both insurance policies.
Vehicle Ownership
If the teen has their own vehicle, it should be insured under the name of the parent who owns the car. If the teen owns the car, they may need to get their own insurance policy.
Payment Responsibilities
Often, the custodial parent is responsible for the insurance on the vehicle the teen primarily drives. However, this can be split or alternated between parents if agreed upon.
What If Your Car Insurance Lapses After a Divorce?
Letting your car insurance lapse during or after a divorce can have serious consequences. In Illinois, driving without insurance is illegal and can lead to fines, suspension of your driver’s license, and even an SR-22 requirement. To avoid this:
- Coordinate the timing of your policy changes so that there is no gap in coverage.
- If your insurance lapses, do not drive until you have secured new coverage.
Frequently Asked Questions (FAQs)
Q: Can my ex-spouse and I stay on one auto insurance policy while we are separated or going through a divorce?
A: Yes, if you’re still living together. However, once one of you moves out, you will need separate policies for each household.
Q: Do I need to get a new car insurance policy right after my divorce?
A: Yes. Once you no longer share an address, you will need separate policies. Contact your insurer to separate the joint policy and ensure continuous coverage.
Q: How do we decide who keeps which cars and insurance after a divorce?
A: The divorce agreement should specify which spouse keeps which vehicle. After that, update the titles and insurance to reflect individual ownership.
Q: Will my car insurance go up because I got divorced?
A: You might see a slight increase in your rates due to the loss of multi-car or multi-policy discounts. However, the difference is usually modest.
Q: What about our teenage driver – do they need to be on both parents’ insurance after divorce?
A: Yes, if the teen drives vehicles at both homes, they should be listed on both parents’ policies.
Q: Can I remove my ex-spouse from my car insurance policy without their knowledge or consent?
A: No. You cannot remove them from the policy without their consent. Ensure both parties are informed and have new coverage in place before making changes.
Q: Is it okay if I continue driving on my ex-spouse’s insurance for a while after divorce?
A: It’s best to get your own insurance as soon as possible. Continuing to share a policy after divorce can lead to complications.
Get a Quote Today!
For assistance with updating your car insurance after a divorce, call Insure on the Spot at 773-202-5060. We’re here to help ensure you stay protected.