Insurance Basics – part 2

Understanding the basics of various insurance policies is important when going through the divorce process. As you have probably had joint policies on everything with your spouse, after the divorce, new insurance will almost certainly be required. In part 2 of this posting, here is some information about additional types of policies you should understand.

Homeowner’s / Renter’s Policies: This type of insurance protect your home and its contents from damage due to many causes and theft. It also provides liability protection should someone be injured on your property or by you through some means other than auto/boat/atv, etc. During the divorce process, often coverage only applies if you are living on the premises. So, if you have moved out, you may not be covered. Therefore, it is important to consider a renter’s insurance policy which can provide the same protections while you are going through the divorce process.

Also, while evaluating your insurance options, you may want to consider purchasing Replacement Cost coverage for your belongings. Most policies offered provide Actual Cash Value – the original price minus the depreciation – reducing the amount the insurance company will pay for an item. For most household items, they become worth very little after only a couple years. However, if cost savings is your primary goal, increasing you deductible will reduce your premium.

Long-Term Care Insurance: This is rapidly gaining popularity as it provides coverage if at some point your require in-home care, assisted living support, and/or skilled nursing care. As you no longer have a spouse to rely on to provide such care, and if you do not have the assets to afford to pay for it privately, consider obtaining Long-Term Care insurance. Purchasing it while you’re healthy and young will help you obtain the desired coverage at a lower cost.