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Split Time: Kids, Custody And Insurance

Under the act, it doesn't matter whether the children still live at home, whether they're married, or whether they're still in school; they're still eligible for coverage under their parent's policy. (See: "Health reform sticks: Now what?")

Car insurance and children of divorced couples

Determining how to deal with your teen's car insurance creates another set of headaches.

While your teen might feel he's entitled to a car and car insurance, "no teen-ager has a right to receive a car. A judge isn't going to order that," McGinnis says.

Instead, the decision of whether your teen has a car, and who is responsible for paying for insurance, as well as gas, maintenance and repairs, is something that's negotiated between parents and follows no set formula. The decision they reach may or may not be included in the divorce agreement, he says.

Lynne McChristian, a representative of the Insurance Information Institute, recommends parents meet with their insurance agents to make sure they have the proper car insurance coverage for their teen.

If Mom has sole custody, the teen driver should be on her car insurance policy, McChristian says. But if Mom and Dad share custody, both should include the teen on their policies. (See: "Cheap car insurance for young drivers.")

The amount you pay for car insurance for your teenager will vary based on where you live. Insurance premiums vary from city to city, and even among ZIP codes in the same city.

When setting rates, car insurance companies look at the insurance claims history in a certain locale. So moving from a rural to an urban area, or moving from a low-crime neighborhood in a city to one where there are more vehicle thefts and auto burglaries can ratchet up rates.

Life insurance considerations for divorcees

For many divorcing parents with minor children, life insurance is also an important consideration, and a parent might be required to maintain life insurance on the children, as well as the spouse. (See: "Understanding life insurance table ratings.")

As an example, McGinnis mentions a mother who has custody of two children and receives child support and alimony. If the court says she's to receive $1,000 a month in child support for 10 years, or $120,000, and another $1,000 a month in alimony for five years, or $60,000, Dad must maintain life insurance to cover his outstanding obligations, which in this case would total $180,000.

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