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Clean Brakes: Can a Divorcee Remove Their Ex from a PAP?

When the ex-spouse is the second named insured on a personal auto policy and is being unresponsive, at what point are we able to remove them from the policy?
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Clean Brakes: Can a Divorcee Remove Their Ex from a PAP?

I'm working on establishing a standard office procedure for our agency when dealing with divorce and personal auto policies, specifically when the ex-spouse is the second named insured and is being unresponsive.

Q: At what point are we able to remove the other party from the PAP?

Response 1: A spouse who is a second named insured on a PAP should not be removed as a second named insured on that policy unless and until the agency receives direct communication—preferably in writing—from the second named insured that they approve of the change. 

The definition of “you" and “your" in the ISO PP 00 01 PAP appears clear in regard to the situation when the spouse ceases to be a resident of the same household. However, it is not nearly as clear in regard to the situation when the individual is no longer the spouse of the first named insured.

Hopefully, your agency can retain the second named insured as a client under a new PAP in their own name and make all adjustments to the original policy at that time. I understand, however, that in many contentious separation or divorce situations, the departing spouse doesn't want to have anything to do with their former relationships, including their insurance provider. 

Response 2: It isn't a simple question because of the legal implications. In most cases, you'll want to be on record recommending that your client discuss this with their attorney. 

Response 3: I would let the insurer make the decision since only they and the insureds are parties to the contract.

The first question is: What's the hurry to remove the other party? Is one of the parties requesting it? If so, have that person get the other party to comply and respond.

What can or can't be done is governed by the insurance contract's provision for who is authorized to make changes. It may also be governed by how the parties are shown on the declarations, for example, “John and Joan Doe" or “John or Joan Doe."

The bottom line is: do not do anything to reduce or eliminate coverage for a named insured without express written permission.

Response 4: It's rarely safe to remove a policyholder without their consent. If a former or separated spouse isn't willing to sign a policy release, then it's best to let the current policy lapse and issue a new policy for the spouse who wants to continue their coverage. 

Even then, it's a good idea to advise the former or separated spouse of the cancelation by sending notice to them at a new address. The person wanting to continue coverage could even authorize their removal from the current policy and its transfer to the other party. 

There are several companies that have introduced provisions in their policies that authorize any named insured, or in one case the first named insured, to make changes to the policy including removing the other policyholder. In those cases, removal of one insured by another may be appropriate. Even so, it's a good idea to notify the affected party whenever possible.

Response 5: In the case of a nonresponsive ex-spouse, do these four things:

1) Document the titles, usage and locations of all cars on current policies and deal with that info appropriately.

2) Send a postal letter and email to the last known address of the nonresponsive person, explaining exactly what changes are being made to the policy and strongly suggest they get in touch with you.

3) Maintain cell numbers for all members of households so you can reach out and, of course, document that attempt. If contact is made, document it.

4) Determine and document all potential and previously listed drivers and add as appropriate.

If property coverage is also in place, that is another whole set of issues. When I teach personal lines classes, I facetiously advise not letting your insureds get divorced because it causes a lot more work and exposure for you.

This question was originally submitted by an agent through the Big “I" Virtual University's (VU) Ask an Expert Service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.