Adoption disruption insurance (ADI) is often referred to as adoption insurance. Again the insurance is to help families within the U.S. adopting domestically to recover certain qualifying expenses if an adoption is disrupted or falls through.
Adoption insurance may cover out of pocket costs such as delivery expenses, birth mother’s legal expenses, homestudy costs and/or travel expenses.
Many situations can cause an adoption to fall through, including a miscarriage, complicated legal issues, or simply the birth mother changes her mind and cancels her adoption plan.
It is important to review the adoption insurance policy regarding the coverage limits, conditions, limitations, warranties, and especially exclusions.
Most adoption insurance is only offered for adoptions that are handled by an approved adoption attorney or agency and for only the adoption of a child under the age of 2 years and within the United States.
If the adoptive parents decide not to go through with the adoption, the expenses are usually not covered. The coverage only applies if the birth parent changes her mind.
If the prospective adoptive parents live in a State that qualifies for adoption insurance, but adopt a child from another State, typically the policy will provide coverage as long as the policy was purchased by a resident of the State in which it was offered. Again, typically international adoptions are excluded.