This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

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.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 17,440.59 -127.94 -0.73%
S&P 500 2,067.64 -12.01 -0.58%
NASDAQ 5,039.7760 -48.8540 -0.96%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs