How can divorce impact my insurance? | PEMCO

July 6, 2023 by PEMCO Insurance

GettyImages-1369572239.jpgLike any life-changing event, divorce can affect your auto and home insurance. But exactly how it impacts them will depend on issues most divorced couples face: setting up separate households, retitling vehicles to reflect one person’s name only, and child-custody arrangements, which determine whether to add a teen driver to your policy. 

No two couples divorce in exactly the same way. Here’s why you’ll want to call your agent or insurance company for advice as you prepare to navigate single life.  

Why would my auto and home insurance change after a divorce? 

  • (Auto and Home) One or both people change their address. Moving to a new home doesn’t just affect what you’ll pay for homeowner, renter, or condo insurance. It also impacts your auto premiums. That’s because auto insurance rates consider the traffic density where you live as well as how far you drive to work. 

    If you’re currently a renter, know that renter insurance is simpler to “move” than homeowner insurance, since you’re continuing to insure property and liability only (rather than a whole new structure), but it still requires a call to your insurance company.  
    As for price, rates for both could change depending on where you move. 

  • (Auto and Home) You split up your possessions. Your most valuable possessions are likely your vehicles, which you’ll need to retitle after a divorce to show who now owns them (and you’ll need to reflect that change on your new auto policy).  
    For other possessions, while you’ll likely have fewer to insure overall, you also may bear the sole responsibility for any high-value items you keep, like jewelry, fine art, or firearms that often require additional insurance. You’ll need to insure them with an endorsement under your new homeowner, renter, or condo policy. If one ex-spouse is staying in the home, they’ll need to update their coverage, too, to reflect the belongings that remained. 

  • (Auto and Home) You may become ineligible for a multiple-policy discount when you move out. You can maintain it, however, if you bundle insurance for your new place through the same company that provides your auto coverage. It’s yet another reason that, if one ex is keeping the shared home and the other is moving into a rental, the renter should get renter insurance right away. 

  • (Auto and Home) Your policy premiums will reflect single rather than married rates. Statistically, married people have fewer claims than single people so rates for married couples tend to be somewhat lower. Because so many factors go into calculating rates, however, marital status usually has only a small impact.  

  • (Home) You may become ineligible for a homeowner or renter policy claim-free discount when you move out. If you and your ex stay with PEMCO, both of you will most likely get the benefit of your claim-free years together. One of you will simply be issued a new policy number. If you go with another company, though, you may find yourself starting over.  

  • (Auto) You may become ineligible for an auto policy multi-car discount. Vehicle count is the only determinant of whether PEMCO or any insurer can give you a multi-car discount. If you take one car and your ex takes the other, that leaves each of you with just one car insured under separate policies. 

  • (Auto) You may lose or gain an auto policy homeownership discount. If a home purchase is part of your new living arrangement, you may see a benefit on your auto insurance rates. Many companies, including PEMCO, offer auto discounts for homeowners because homeownership correlates with lower auto claim frequency. 

  • (Auto) Your ticket- and accident-forgiveness benefits may not follow you. If you and your ex stay with PEMCO, both of you will most likely get the benefit of your years of good driving together. One of you will simply be issued a new policy number. If you go with another company, though, you may find yourself starting over.  

What insurance changes should I discuss with my ex? 

  • You can’t remove someone from your policy on your own. Whether it’s an auto, home, or renter policy, you can’t simply take someone off your policy without their consent. Also, if you’re living in different homes during a separation, your auto policy needs to reflect your current address (even if the owner named on the vehicle’s title will eventually change), so don’t wait to notify us about a change in the vehicle’s garaging location until the divorce is final. 

  • You need to insure teen drivers. Make sure you discuss this as part of your divorce agreement (for example, we’ve seen instances where one parent is required to provide a vehicle while the other provides insurance). It’s something that’s easy to overlook, especially if your kids are a few years away from driving age.  

How can I find out more about how divorce affects my insurance? 

We understand how overwhelming the details of a divorce can be. If you have questions, please call your local PEMCO agent or 800-GO-PEMCO and we can walk you through the specifics of your situation. 



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