How life changes can affect your insurance
Sep 15, 2015 4 minute read
At BrokerLink, we encourage you to reach out to your broker at any time to discuss changes to your policy or questions you may have. This could include a new car, buying or selling a home or even making a claim.
You might not realize though that major life changes, such as marriage, divorce and losing a spouse call for revisions to your insurance policy, since these changes involve adding or removing individuals. Significant life changes often require insurance policies to be adjusted to suit the needs of the new policyholder. We can help you navigate these situations and advise you of any important information you should be aware of.
Beginning a new life with another individual can be a very exciting time. You will need to consider how your insurance will affect and provide coverage your new spouse. If you and your spouse purchase property or vehicles together, you should both be listed as a “named insured”. This means that each of you will be able to make adjustments to the policies and file claims.
In a situation where either party already owns property or vehicles, the owner can add the other individual to their insurance policies as a “named insured”. Keep in mind that this will also require the owner to legally share ownership of their property or vehicles with their partner, such as adding their partner’s name to their mortgage or car deed.
A divorce or separation does have an impact on your insurance. When this happens, important decisions need to be made, including determining the ownership of possessions. When deciding ownership of major items such as your home or vehicle, it’s important to update your insurance.
For example, if a couple own a home together and have decided to separate or divorce, both parties should contact their broker to inform them of their situation. As homeowners, both individuals will have ‘named insured’ status on their insurance policy. Neither one can delete the other without the other individual’s consent. Therefore, both parties must be in contact with their broker and complete the appropriate paperwork to have one person removed from the policy.
If the couple did not update their home insurance policy to reflect their split, both individuals would still be liable for any damages or injuries sustained on the property, even though one person no longer lives there. Each party should also update their home inventory checklist and work with their broker to ensure their content is adequately insured. It will also be crucial to set up a new homeowner’s or tenants insurance policy for any new residences.
What if each person owns a vehicle? If prior to the split, they were co-owners on each other’s auto insurance policies, meaning they were both listed as a ‘name insured’, similar to adjusting their home insurance policy, both parties would have to contact their broker to delete the other individual from their auto insurance policy.
It is also important to remember to have any occasional drivers, such as teenage children, added to any new policies.
Losing a spouse
During the loss of a loved one, insurance is likely not top of mind. However, the passing of a spouse can create the need for policy changes when it comes to having current and adequate coverage. Anyone who may have shared ‘named insured’ status on an insurance policy with the deceased will be able to make policy adjustments such as adding or reducing coverage.
However, only the individual who the deceased assigned to be the executor of their will is able to delete the deceased from their insurance policies. When doing this, the executor of the will must present legal written confirmation such as a death certificate.
An ‘additional named insured’, meaning someone who is listed on the policy to receive coverage but is not a primary policyholder, will be unable to make any changes to the policy. This is commonly the case when non-married couples move in together; however, this can also be the case for some married couples as well.
Other life changes
In your golden years, you may decide you no longer want to care for your home and wish to move into a senior’s residence. If this is the case, we recommend purchasing a senior’s tenants insurance policy to protect your possessions in the retirement facility and to provide you with liability coverage should you be involved in an incident such as accidentally causing a flood or fire.
When you move to a retirement residence, should there be a time period where no one is residing on your property, either before a family member or tenant moves in or before it has been sold, the property will be deemed vacant by insurance standards. You will need to contact your broker to inform them that the home is vacant and to receive a vacancy permit.
A vacancy permit offers protection against major risks such as fire. However, during this vacancy period there will be limited coverage against vandalism, theft or water damage. If and when the property is rented, you will need to inform your broker so your policy can be updated accordingly. Likewise, it is highly recommended your tenant purchases tenants insurance.
With all of life’s unexpected events, it is important to stay adaptable. Adjusting your insurance policies is an important component. Contact your BrokerLink broker for further information and to discuss what insurance options fit your current situation best.