Divorce, Kids and Auto Insurance- How to Avoid Trouble
When a couple divorces, lots of considerations regarding the children are addressed upon the finalization of the divorce, such as living arrangements, child custody and support, and health insurance coverage.
Something that is easy to overlook once children of divorce are old enough to drive is auto insurance coverage.
“This is an area that is easy to generate arguments among the divorced spouses, particularly if they don’t have a friendly relationship following the divorce,” says John Griffith, a certified family lawyer in Encinitas. “Just remember – this isn’t about your ex. This is about the protection of your children when they are behind the wheel. You need to make sure your kids have proper coverage.”
The policy- his, hers or both?
Divorced couples must get their own auto insurance coverage after they’re divorced, according to a Forbes article. The rules regarding coverage for children vary among insurance companies and according to situations, so both parents should consult their respective insurance carriers to ensure that their teenager is properly covered. In some cases, the children may be able to have coverage solely through the custodial parent. In others, the child may need to be included on both parents’ policies.
“The important thing is to avoid a situation where both parents assume the other is handling the auto insurance, and then finding out once an accident has occurred that neither took care of it,” Griffith says.
That is a reality for some families. This happened to a couple whose daughter turned 17 and the father allowed her to drive one of his company vehicles, according to an article in The Signal. However, he didn’t provide auto insurance. The daughter was the at-fault driver in a car accident that injured the other driver. That driver sued the mother, who assumed her daughter was covered under her auto insurance.
As it turned out, the insurance company excluded the daughter from coverage because the truck she drove was furnished and available for the daughter’s exclusive use, which triggered the exclusion from coverage for a non-owned automobile, the article states.
This case is similar to the California case Nationwide Mutual Insurance Company v. Shimon, in which the Court of Appeal upheld the notion that a child’s regular use of a non-owned automobile could be excluded from coverage.
This isn’t a lesson divorced parents want to learn the hard way, Griffith says. The result could be a costly lawsuit.
Be sure to address auto insurance when your child gets his or her license and hits the road.