By Lynn Toynton, Insurance Adviser, Partners&
Divorce is, without doubt, an incredibly difficult time for anyone, and at the precise moment when your emotions are stretched to their very limits, you are suddenly expected to turn into some kind of personal assistant, closing down and starting up myriad new insurance policies, services and accounts – including, of course, the multiple insurance policies that came with your former, married life.
So that’s the bad news. The good news – and I genuinely hope this will be good news and possibly something you weren’t aware of – is that an experienced insurance adviser like myself at Partners& can help you deal with making all the changes necessary to your policies. One phone call to me, where we’ll have what I call a ‘blank piece of paper’ conversation, so I can ascertain what needs doing and I’ll be happy to do all the hard work for you – it’s my job.
The other piece of good news is that my services are completely free of charge and your policy will not cost anymore if you get it from me or on your own via the internet - although I may work with insurers who are better suited to your particular circumstances than those you’ll find on the internet. We are not tied to using any particular insurer and provide a personalised recommendation based on a fair analysis of the insurers approached. So, take a deep breath, and know that the team and I are here for you, but in the meantime, it might be worth thinking about the things that will need changing.
What you need to know about updating insurance policies after divorce
Is it better to get all new insurance policies and/or find a new insurance adviser?
If you are a high net-worth couple or a couple who have had a long marriage with multiple policies all placed with one adviser, then you may feel happier choosing a different adviser for yourself going forwards. Why? Well let’s just say sometimes accidents do happen.
Here’s an example. A man had two home and two content insurance policies, one with his ex-wife and one with his new partner. The client rang up his broker and asked him to add some jewellery he had bought for his new girlfriend to his contents policy – but failed to stipulate which policy. By accident the items were added to the ex-wife’s policy, which she subsequently found out about and, well, let’s just say, it didn’t go down well.
We would generally advise that where possible, you should request your own adviser who has no contact with your former partner, so you can be assured of receiving completely unbiased advice and that your future insurance dealings will be completely confidential.
Will I need any new insurance policies as a single person?
When we’ve been through the list below, I’ll have a pretty good idea what you are and are not covered for and I’ll be able to make suggestions. For instance, you may be paying for insurance for things you don’t need or have duplicated policies. Are you paying for travel insurance via your bank and a stand-alone policy? If so, let’s get rid of one. Are you paying for the use of a courtesy car with your car insurance policy but have access to a second car, so you don’t really need it? If so, we’ll make recommendations that suit your needs and requirements. This is where a good adviser can really make a difference. We know our markets and can make sure you get the most appropriate policy for your circumstances.
What insurance policies will I need to change when I get divorced?
If you’re going through a divorce or thinking about it, as an initial guideline, we would advise you look at the following details in your policies:
Your home insurance policy may be in one or two names. Find out which. If you are staying in the marital home, you may just need to have your partner’s name removed from the policy. If you are moving into a new home, then obviously you’ll need a new policy. Depending on the acrimony in the divorce, the primary name on the insurance policy may refuse to allow it to stay with the property in which case you may need to start from scratch.
This usually comes as standard with your home insurance policy and definitely needs updating. If you and your partner are splitting assets, then good news, you’ll only need to pay for insuring half the amount of assets. Note: If you are moving into a substantially smaller property (for example, out of a six-bedroomed house into a two-bedroomed flat) but still bringing your art collection, jewellery and watches with you, then this may need to be insured as a non-standard risk. Insurers look for parity in the size of the home to the contents insured, so be aware this may deliver some challenges with certain insurers.
If you have both of your jewellery collections insured on one policy then yes, you will need two new policies. It may also be a good time to have them revalued especially as the price of gold has risen dramatically over the past few years. I can help arrange a valuation for you.
You will want to hold on to any ‘no claims bonus’ you have built up with your car, as it can substantially reduce the cost of your annual premium.
If the policy is in your name, that’s fine, simply carry on paying as before. If the policy is in your partner’s name and you were a named driver, you will need a letter from your partner agreeing that yes, you can have the no claims bonus associated with the car. You (or I), then send this to your new insurer who should accept the letter as proof and let you have the no claims bonus.
If your partner is not willing to write the letter, you can try to approach the original insurer directly, explain the circumstance and they may agree to ‘mirror’ the discount as an ‘Introductory No Claims Discount’ which could be up to 40% off a new policy price. I, or your insurance adviser, can of course do the negotiations on this for you.
It may be that you were named on your partner’s health insurance policy. If you would like to continue cover, I can talk to insurers and negotiate a new policy for you. What you don’t want to do is take out a new one and discover that you can no longer claim for your upcoming knee operation because your new policy holder deems it to be a pre-existing condition and you aren’t covered now. Let me talk to the insurer for you to make sure we get the most appropriate result.
Similarly, you don’t want to rush to take out a new pet insurance policy as any conditions they have had under your current policy won’t be covered under your new one. Let me make some calls to see if we can transfer the details to a new policy but with the same insurer.
Many people these days have their travel insurance through their bank account – so let’s check first before you splash out (pardon the pun) on a new policy. If you have any of the paid for types of bank accounts, then you are almost certainly already covered. If you were covered on your partner’s policy we may be able to negotiate a new policy for you, or roll it into your new home insurance policy.
Are there any benefits, being a divorcee, regarding insurance?
A few! Insurance is all about risk, so if your risk goes down, so will your premiums. Moving from that six-bedroom house to a three-bedroom house means your home insurance premiums will go down. Was your partner particularly well known? Did they have a high profile online? Were they constantly on Instagram showing photos of themselves away from home, wearing expensive jewellery? Were they in the motor or antiques trade? If so, your premiums would have reflected this and yours alone may be reduced.
We’re here to help
I know this is a scary time but please, know that my team and I are here to help. If you would like any advice at all about updating your insurance policies following a divorce, please, give me a call, I’d love to help.