Policy Holder Dies

Navigating the implications of car insurance following the death of a policy owner can be daunting and confusing, especially during a time of mourning. Read on to learn more about what happens to auto insurance after the death of a policyholder.

If you are in need of a new auto insurance provider or policy, use our free tool above by entering your ZIP code.

If the current policyholder dies, what happens to the policy?

Is car insurance valid with a deceased owner? If the person who owns the car insurance policy dies, technically, the policy ends and is no longer valid. However, if there is more than one name on the policy, then the other party must inform the car insurance company after the other person dies soon as possible.

In almost all cases, insurance companies are lenient, sympathetic, and helpful to the relatives, spouse, or children of the deceased. They will probably allow the policy to stay active for a short period to give the family enough time to sort out the details.

If the deceased co-signed the insurance policy with the spouse, the insurance company will simply transfer the plan to the living party who is legally identified as the executor of the estate. For car insurance confirmation, a broker can work out the details quickly and finalize the insurance policy within a few days.

If the insured car is not to be used anymore for any reason, the policy should be terminated and the registration tags and license plates surrendered to the local DMV. If a member of the family would like to keep using the car, he should have the registration and ownership transferred to his name and then insured under his name.

Compare Quotes From Top Companies and Save

 Secured with SHA-256 Encryption

Family Legal Issues

Once you do begin to review insurance policies, your focus will more than likely be on life insurance, final expense, and accidental death policies rather than personal lines of insurance.  Also, you’ll need the person’s Social Security number and a photocopy or a certified copy of the death certificate to close or transfer banking or savings accounts.

If the deceased person had a substantial outstanding debt with various financial institutions, it’s a good idea to hire a probate attorney who can handle these financial matters on behalf of the deceased.

The Bottom Line

If someone has died, their car insurance policy needs to be canceled, or if they’re not driving anymore, they’ll need to be removed from any policies they were on.

A common misconception about car insurance is that if one of the policyholders dies, their policy will be canceled and the coverage will stop immediately. Unfortunately, the insurance companies don’t know whether a policyholder has died until they receive notification from a spouse or relative requesting that their policy be canceled.

Under no circumstances should the family retain the insurance policy under the name of the deceased because that could complicate the situation and even be used as a cause for insurance fraud.

Enter your ZIP code into our free tool below for affordable auto insurance rates from car insurance companies in your area. 

Related:

• What are the Top Five Things to Know About Car Insurance Claims?
• How does excess work on third-party car insurance claims?
• What are my rights when filing a car insurance claim?
• What are the options if my car insurance does not pay claims?
• How do you file personal injury claims through your car insurance?
• How can I settle my car accident claim without the insurance company?
• How far back do insurance companies go when looking at auto claims?