Car Insurance Policy When a Person Dies
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UPDATED: Jul 14, 2021
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- If premium payments are being timely made for an auto insurance policy, the policy will stay in effect even after the death of the named policyholder
- If the deceased policyholder has a living spouse, then the surviving spouse can have access to the policy even if he or she is not a named insured on the policy
- If the named vehicle under the policy is left to the estate of the deceased policyholder, then the executor of the estate is able to legally drive the car as long as it is for the purpose of the administration of the estate or to maintain the value of the car
- If you are a surviving spouse that was not named under the auto insurance policy, you may want to have yourself directly added to the policy if you intend on keeping the vehicle
- If the estate has plans to sell off the insured vehicle, then you may want to wait until the official registration for the vehicle has been totally changed over before cancelling coverage under the existing auto insurance policy
When an auto insurance policyholder passes away, the auto insurance remains in place for the insured vehicle as long as the premiums are being paid.
However, if you are a surviving family member of the deceased policyholder, you should not rely on the existing auto insurance to pay for a claim involving you driving the insured vehicle unless you are specifically added to the auto insurance.
Contact the agent for the auto insurance policy as soon as possible to make sure that you are not paying for coverage that you do not need or cannot use.
Use of a Policyholder’s Car After Death
In the aftermath of dealing with the death of a family member, you may not think twice about using the deceased car, but if your use is not for very specific purposes, a claim may not be covered by the deceased policyholder’s insurance if you should get in an accident.
There are very few reasons for driving the deceased policyholder’s car, such as the following:
- to maintain it in good condition
- to have necessary repair work done
Only the legal representative may use the car for these purposes.
If the insured policyholder dies because of an auto accident, then there may be a death benefit available. This is an optional coverage that would be in addition to any basic auto liability coverage. You would likely pay a higher premium to include this coverage.
When you are shopping around for auto insurance policies, you should consider your specific coverage needs, which will probably exceed those required under your state law for maintaining sufficient auto insurance coverage.
Be sure to ask various auto insurance companies how these optional coverages could affect the price of your premium.
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The Surviving Spouse
The surviving spouse may wish to transfer the title to the deceased policyholder’s vehicle into his or her name. This is accomplished by bringing the title documents to the secretary of state office for your state along with the death certificate for the policyholder.
In the case that there is a personal representative of the estate appointed, this person would be involved in assigning the title to the car. The surviving spouse may already be listed on the title with full survivor rights, so this step may not be necessary.
Another piece of information that you will have to present in dealing with the transfer of title to the deceased’s vehicle is the current auto insurance information on the vehicle.
This is because every driver is essentially required to maintain proof of a minimum level of auto insurance to be able to drive legally in almost every state in the U.S.
The state department of insurance or motor vehicles keeps this information on file for every registered vehicle in the state.
If you choose to keep the title to the vehicle, as a spouse, you may be covered under the policyholder’s insurance for a limited time as long as the premiums are getting paid.
You will want to call your auto insurance agent directly and ask to be officially added to the policy so that you get copies of all important documents. In the even that you have to file a claim down the line, this will also prevent any unnecessary confusion or delay.
Non-Use of the Vehicle
Because almost every state in the U.S. requires proof that every registered vehicle is covered by at least a basic auto liability policy, you will have to keep the vehicle insured even if you do not plan to drive it.
The exception to this rule is if you file an affidavit of non-use to either your state department of insurance or state department of motor vehicles.
This may be a good option for you to consider if you are planning to sell the car but think that it might take a while for the sale to go through. In this case, it is not a good idea to have the car sitting around without any auto insurance coverage.
You do not want to end up paying fines or being unable to transfer the title of the car to a new owner down the line because you do not have the proper auto insurance requirements in place.
If you do not take the proper steps to notify your state department of motor vehicles, you should plan to maintain the required auto insurance on the vehicle until you have actually sold it and the registration officially switches over to the new owner.
You should find out from the auto insurance agent whether the entire premium amount was paid in a lump sum at the beginning of the term or if the estate will be responsible for making monthly payments.
Dealing with a Car Insurance Policy After a Death
Dealing with the death of a family member can be a horrific experience, so many details regarding the administration of the estate can seem overwhelming.
The good news is that dealing with the auto insurance side does not have to be at all.
To the contrary, the auto insurance policy typically remains in effect for the insured vehicle as long as the premiums are paid on time. If you are the surviving spouse or personal representative of the estate, you should not have a difficult time getting added to the coverage.