What Is Insurance Revenge in Divorce?

Unfortunately, when tensions are running high in divorce, people who are normally reasonable can become irrational. Some spouses will resort to a range of tactics to try to punish the other spouse, from restricting time with children, to negotiating for control over certain assets. If the divorce is particularly acrimonious, a spouse may go to extreme lengths to try to hurt the other spouse by resorting to insurance revenge.

While this may not sound as ominous or dangerous, the impact of this type of vengeful behavior can be financially devastating. If you are considering a divorce and are experiencing insurance revenge, it is in your best interest to contact a skilled divorce lawyer at your earliest convenience.

Insurance revenge occurs when your spouse tries to access your insurance policies, or any shared policies, with the intent of inflicting damage, including financial loss, property damage, and bad credit scores. Insurance revenge can occur with practically any type of insurance, such as homeowners and renters insurance, health insurance, and life insurance policies. The following are examples of how insurance revenge is carried out with a variety of insurance policies.

Homeowners Insurance

If your spouse has access to the property, they may file a claim for a fake accident or cause damage that could jeopardize a legitimate claim. For example, suppose a couple is in the process of separating. A spouse may try to go into the other spouse’s home and cause damage. As a result, that spouse would have to handle property damage and may even be dropped from their insurance policy.

Auto Insurance

If your spouse’s name is still on the title, they could take the license plate and registration from the vehicle without your knowledge. If your spouse turns in the plates and files the vehicle as no longer being used, the insurance company would drop coverage, and you would not be protected if you were involved in an accident while driving that car.

Health Insurance

If you are on your spouse’s health insurance policy, this is an important issue to address during negotiations. If you are unemployed, you may need to stay on your spouse’s policy after the divorce. However, if this is not included in the divorce order, you may be dropped from the policy. Unfortunately, you may not learn that you are no longer covered until you actually need medical care.

Life Insurance

Before you make any changes to your life insurance policies, make sure that you talk to a financial professional. If you have children, you may want to consider leaving your ex-spouse as the beneficiary so that they can access those finances to pay child support, college tuition, or other major expenses if you were to pass away.

Insurance experts recommend term life insurance over whole life insurance because it is less expensive and can be structured in a way that protects your children until they reach a certain age.

How Common Is Insurance Revenge?

When separating becomes hostile, the situation can quickly escalate. In extreme cases, a spouse or domestic partner may resort to domestic violence. While physical abuse is what most people think of when they hear the term domestic violence, any pattern of behavior that is used to gain power or control over another person is considered domestic violence, according to the National Domestic Violence Hotline. Insurance revenge is one way that your spouse can exert control over you.

Unfortunately, this type of abuse is more common than you might think. In fact, over 94 percent of those who experienced domestic violence report that they have also experienced economic abuse, the National Domestic Violence Hotline states. Unlike physical abuse, economic abuse is not as obvious, yet it can be just as devastating. The following are examples of tactics that abusers may use:

  • Making a false homeowner’s insurance claim after intentionally damaging your property.
  • Removing your name from an insurance policy or changing the billing address.
  • Canceling your car insurance policy without telling you, leaving you uninsured if you are involved in an accident.
  • Taking money from a cash value life insurance policy or intentionally skipping payments, resulting in the cancellation of the policy.
  • Making unreasonable demands for insurance claim payouts that occur after the separation.

How Can I Protect Myself From Insurance Abuse?

Once you have initiated the separation or divorce process, it is important that you take immediate steps to ensure that you are legally and financially protected. You are strongly urged to contact a skilled divorce lawyer who will thoroughly review your case, ensure that your rights are protected, and take proactive steps to protect you from insurance revenge. There are also a number of things that you can do to protect yourself if the divorce is acrimonious and you think your spouse will become financially abusive:

  • Keep detailed financial records in a safe location, like a safety deposit box or a safe for which only you know the combination. Make copies of important documents and give them to a friend or family member that you know you can trust.
  • Get copies of your credit reports.
  • Secure a separate car insurance policy so that your estranged spouse cannot cancel it and leave you uninsured.
  • If you are moving out of the home that you shared with your spouse and you will be purchasing or renting a home, it is very important that you get a homeowners policy or renters insurance as soon as possible. In addition, if your spouse has become aggressive or has threatened violence, you should strongly consider installing a security alarm and a video surveillance system for protection and peace of mind.
  • Remove your spouse from your health insurance policy as soon as possible. If you were covered under your spouse’s health insurance policy, you will likely be able to continue coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA). You should also remove your spouse from your life insurance policy unless you have children and the money would be used for tuition, child support, and other expenses that would benefit the children.
  • You also want to prepare for the possibility that your spouse will remove you as a life insurance beneficiary, which they can do without notifying you. Your divorce lawyer can determine who owns the policy, who is responsible for maintaining it, and if your spouse has removed you from the policy.

You may also contact your insurance company if you are going through a difficult divorce and you are concerned that your spouse may resort to insurance revenge. According to the Assistant Vice President at the American Property Casualty Insurance Association, survivors of domestic violence are already vulnerable and may be at an increased risk of facing financial hardships. Those who are in this position are encouraged to reach out to their insurer for support.

Somerville Divorce Lawyers at Lyons & Associates, P.C. Can Help You if You Are Experiencing Insurance Revenge

If you and your spouse are planning to file for divorce, you are urged to contact one of our Somerville divorce lawyers at Lyons & Associates, P.C. as soon as possible. If your spouse has removed you from insurance policies, intentionally damaged your property, or engaged in any other behavior that is considered insurance revenge, our skilled legal team will take proactive steps to ensure that your rights are protected. To schedule a free consultation, call us today at 908-575-9777 or contact us online. Located in Somerville and Morristown, New Jersey, we serve clients throughout Somerset, Woodbridge, Morristown, Parsippany, Rockaway, Short Hills, Chatham, Randolph, Madison, and Morris Plains.