Studies indicate that the divorce rate in the United States is around 36%. With that in mind, thousands of Illinois residents go through the process of ending their marriage each year. While divorce creates several financial issues, knowing what to do with a homeowners’ insurance policy is perhaps one of the most important.
Updating the policy
If you keep your marital home following a divorce, you are responsible for updating your homeowners’ insurance policy accordingly. Only people listed on the policy can make changes to the policy. Some insurance companies allow you to update your policy online while others require you to call and speak with an agent.
Specific coverage changes
In addition to removing your ex from your insurance policy, you may need to change your coverage. If your spouse receives half of the belongings in the home, you don’t want to continue paying for insurance coverage on those items. Create an inventory of the items that remained in your home after the divorce and request a quote on insuring those items.
What will happen to your rate?
There is no way to know exactly what your insurance company will do with your insurance rates following your divorce. If you received discounted rates based on bundling policies together, the rates may go up. Lowering your coverage on the contents in your home may lower your rates.
How to save on your insurance policy
Since you can change your homeowners’ insurance policy after a divorce, look for ways to save. Choosing a policy with a higher deductible helps you save on your monthly costs. You can also invest in a home security system to lower your insurance rates.
Divorce impacts virtually every aspect of your life, including your finances. Knowing how to handle your homeowners’ insurance policy can help protect you financially and give you greater peace of mind.