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What happens to car insurance if the policyholder dies? [VIDEO]

  • Auto Insurance
  • Renee Martin
  • 7 minutes

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Dealing with the loss of a loved one can be hard. The last thing you need while you grieve is to think about tying up loose ends–like claiming their life insurance coverage or terminating their car insurance policy. Here’s how you can deal with car insurance if the policyholder dies.

Is a car insurance policy valid after the policyholder dies?

After the policyholder passes away, their car insurance coverage is technically no longer valid. However, if you are a named driver, the insurance company will help you transfer the coverage to your name. Take a look at the insurance ID card or the insurance policy’s declaration page to find out if you are listed as a covered driver.

It’s always a good idea to call the insurance company or agent for assistance in determining what to do. Get hold of your loved one’s insurance policy to find the insurance company’s contact details or its agents.

What happens to car insurance after the death of a spouse?

First and foremost, check the car insurance policy’s declaration page and car insurance ID card. If you find the deceased policyholder’s spouse as a named driver, there’s less paperwork to complete. This is because the spouse typically has the same rights as the deceased policyholder.

Does the spouse’s name appear on the car insurance policy? If yes, they must inform the insurance company about the demise of the policyholder. 

Apart from removing the deceased policyholder from the policy, the car insurance policy will remain unchanged. This can also help remove a covered car from the policy.

To remove the deceased policyholder, the surviving spouse must provide a copy of the death certificate to the firm.

Read: Top 10 cheapest cars to insure in 2021

What happens if a relative who is on a different policy dies?

Handling the car insurance policy of a relative where you are not a named insured can be quite tricky. You won’t be able to cancel a deceased family member’s vehicle insurance policy with a simple phone call. The insurance company, which is in charge of the policy’s security, will safeguard its client’s assets by making it difficult to access or cancel the policy. Therefore, the insurance provider can ask for proof of your standing as the executor of the estate.

Now you may think that the insurance company is trying to be tough when things are already bad. But that isn’t the case at all. The insurance company wishes to protect its clients from fraud as part of its responsibilities to them. Contacting the insurance company’s customer care department with your documentation on hand is the best method to resolve the matter.

Read: Top 10 most stolen cars in Texas

What else happens to the car insurance policy after the policyholder dies?

Family members mustn’t keep the deceased driver’s auto insurance policy active. This is because only the policyholder has the authority to allow someone else to drive their vehicle. If the policyholder is no longer alive, they cannot legally permit another person to drive their car.

If you let the deceased driver’s car insurance continue, you may find yourself in a tough spot later. Any claims filed after the policyholder’s death will be denied. As a result, you could be held liable for damages. You could also be charged with car insurance fraud if you file a claim after the policyholder has died.

Furthermore, only policyholders have access to update their coverage or view individual insurance paperwork. It’s best for the executor of the deceased to handle their insurance policies.

What to do if the policyholder’s car is going to be used?

If you intend to drive the deceased policyholder’s car on public roads, the heir of the deceased or the executor of their estate must have the car re-registered in their name. They must also get car insurance in their own name to legally drive on public roads.

What to do if the policyholder’s car isn’t going to be used?

If no one in the family will use the deceased policyholder’s car, you must cancel the insurance policy. Additionally, you must also submit the car’s license plate and registration tags to the local Department of Motor Vehicles (DMV) office after canceling the insurance policy.

Read: Parked car insurance explained in minutes!

How to cancel car insurance after the policyholder dies?

After the death of a policyholder, their car insurance policy is only useful if the deceased’s heir takes over the car’s title. In other words, if you don’t intend to drive the car, keeping the coverage active is pointless.

The following are the steps to canceling a car insurance policy:

  • Wait until someone else becomes the registered owner of the vehicle before terminating the auto insurance.
  • The policyholder’s estate could be entitled to a refund of unearned premiums. Inquire with the insurance provider or agent.
  • Check with the insurer to see if they can waive any early termination fees due to the tragic circumstances.
  • You’ll need to send an original, certified death certificate to the auto insurer, as well as proof of your executorship (e.g., executor of estate documents, probate form).
  • Check to see whether your automobile insurance policy includes any death benefits that would apply in the event of your loved one’s death.
  • If a member of your family died while driving the vehicle, the insurance company would almost certainly declare the vehicle totaled. You can terminate the policy once the insurance company resolves the claim.

How to transfer car insurance to the deceased policyholder’s heir?

Most insurance companies have terms that allow a surviving spouse to retain their current car insurance policy. The car insurance policy can be passed on to the surviving spouse or estate executor after notifying the insurance company of the policyholder’s death.

You can contact the insurance company directly or speak with the insurance agent of the dead policyholder. The insurance company is likely to request the original, certified death certificate, probate documents, and an executor of estate document.

Keep in mind that you must pay insurance premiums throughout the transfer of coverage. Check for any continuing automatic payments (also known as EFTs) that the policyholder had set up. You don’t want to close the bank account that keeps your auto insurance current too soon.

After removing the deceased driver from the policy, you could expect a change in the car insurance premium. This is because your loved one may have been eligible for special discounts that you no longer qualify for. Furthermore, several factors determine one’s car insurance rates, such as the driver’s age and driving history. Hence, it’s uncommon for two persons to have the same insurance premiums.

Read: Life in the fast lane: Fast cars with cheap insurance

Final thoughts

Insurance is probably the last thing on people’s minds under normal circumstances, even less so during times of emotional turmoil. However, if a loved one has died, the surviving spouse, family members, or estate executor must act immediately to handle the deceased’s insurance policy. All you need to do to transfer or cancel a deceased policyholder’s car insurance policy is to provide a death certificate to the insurance company and make the necessary amendments.

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