What Happens to Car Insurance When the Policyholder Dies?

After the policyholder's death, the car insurance policy typically remains active until it's transferred to a new owner or canceled.

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Car insurance after death: what happens to the policy?

When a car insurance policyholder passes away, the policy typically remains active for a short period, usually until the estate is settled. That way, the vehicle is still insured while decisions about the estate, such as transferring ownership or selling the vehicle, are being made. 

During this challenging time, understanding how the auto insurance policy continues to protect the vehicle can provide some peace of mind. Whether you are handling a relative’s separate policy or managing a spouse's estate, this guide will walk you through the steps needed to ensure a smooth transition.

Key Takeaways:

  • Notify the insurer of the policyholder's death as soon as possible
  • If you aren't listed on the policy, you will likely have to provide proof of being the executor to terminate the policy
  • In most cases, the policy will remain in force while the vehicle is being used by the estate's executor for estate-related affairs
  • Keep track of all communications between the estate, the insurer, and the state of residence

Death of a relative on a separate policy

Closing a deceased family member’s car insurance policy can feel overwhelming, but knowing what to expect can make it more manageable. Here are some key points to keep in mind:

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It isn't the fastest proccess

Closing the car insurance policy of a deceased family member will likely take longer than a quick phone call. While it can feel like one more hoop to jump through, insurance companies have protocols in place to prevent fraud and protect their clients' assets. 

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To speed up the process, come prepared.

The insurance company will likely require proof of your status as the executor of the estate as well as a death certificate. They may also require proof of the vehicle's current status, such as a proof of sale showing the vehicle has been sold, a transfer of title, or a declaration that the vehicle is no longer in use. 

It's also helpful to have the car insurance policy number and any other relevant details about the policy.

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Verify what to expect with the insurance company.

In most cases, the policy will remain in force while the status of the deceased's vehicle is being decided. Make sure to verify this with the insurance company (in writing is recommended). After the matters of the estate have been settled, your insurance company will likely allow you to terminate the policy.

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Continued premiums

Be aware that the insurance company may continue charging premiums until the policy is officially terminated. However, if there are any unused portions of the premium after the policy is closed, you may be eligible for a refund.


Death of a spouse who is the policyholder

Every car insurance policy has a "policyholder" — the driver who purchased and is covered by the insurance. Policy changes, including the addition or removal of a vehicle or driver and cancellation of coverage, must be authorized by the policyholder. When the policyholder dies, these responsibilities must be transferred to a surviving spouse or the executor of the estate.

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This step will require documentation in the form of either:

  1. Executor Documents: Legal proof of your status as the executor, such as probate forms, may be necessary
  2. A death certificate: Usually a certified copy is required.

Since the process can vary by company, your first step should be to contact the insurance company’s customer service department to understand their specific requirements.

Some other considerations include:

  • Timeline. Upon notice of death — and in most states — insurers will effectively remove the late spouse one day after the reported date of passing.
  • You might be eligible for reimbursement. If the policyholder's name has remained on the policy for months or even years after their death, most insurance companies will process a reimbursement as far back as its systems will allow (usually one to two policy terms back).
  • Don't forget to update the policy. Consider reducing coverage on unused vehicles, adding new drivers, or updating the policy to better fit your current needs.

How to close out a car insurance policy after the policyholder's death

Closing out a car insurance policy after the policyholder's death involves several steps. Here's how to do it:

  1. Gather required documents. The insurance company will typically need a certified copy of the death certificate, proof of your status as the executor or administrator of the estate, and the car insurance policy number.
  2. Notify the insurance company. Contact the insurance company as soon as possible to inform them of the policyholder's death.
  3. Settle any open claims. The insurer will guide you through the process of resolving these.
  4. Formally request a policy cancellation. This typically requires filling out a form.
  5. Check for premium refunds. Many insurers will refund unused portions of the premium after the policy is canceled.
  6. Confirm the cancellation. Ensure you receive written confirmation from the insurance company that the policy has been successfully canceled. Keep this documentation for your records.
  7. If your state requires it, notify the DMV. 
  8. Update estate records. Record the cancellation in the estate’s records to ensure everything is documented for probate or legal purposes.

By following these steps, you can effectively close out the car insurance policy and manage the final details of the deceased's estate.

Nick Fernandez, licensed insurance professional at The Zebra
What happens to an open claim when a policyholder dies?

Nick Fernandez, licensed insurance professional at The Zebra

If you were hesitant to inform the insurer about the policyholder's death to avoid missing a claim payout, don't worry—the claim will still be processed. 

When a policyholder passes away, any open claims will remain active until a decision is made. If a payout is awarded, it will go to the insured's estate, with deductibles and any owed amounts covered by the estate.

Does car insurance cover the death of the owner?

Car insurance generally doesn't cover the death of the policyholder. However, if the policyholder has Personal Injury Protection (PIP) or accidental death coverage and dies in a car accident, their insurance may provide benefits like medical expenses, funeral costs, or a lump sum payment to beneficiaries.

If another driver is at fault in the accident, their liability insurance may also cover certain expenses related to the death, such as wrongful death claims or compensation for the family, depending on the circumstances and legal proceedings.


Car insurance after death: FAQs

There are many things to consider after a loved one has passed away, and car insurance is one that may have you wondering what to do next. Here are some commonly asked questions when it comes to the death of a policyholder.

You'll want to check with your insurance company, but if both of you were on the policy then the name of the deceased spouse can most likely be removed. You will then be listed as the primary policyholder without having to start from scratch with a brand new policy.

When you contact the insurance company to notify them of the policyholder's death, you'll want to have documentation such as a death certificate and proof of executorship. If you have access to a recent statement or a copy of the policy, this may be helpful to the insurance representative, as well.

In most cases, the policy will remain in force while matters of the estate are being handled (verify this with your insurer). However, if you plan on keeping and driving the car, but it was registered and insured under their name only, then you'll need to register and insure the vehicle in your name. Contact your insurance company and the local Department of Motor Vehicles (DMV) for specific questions about your situation.

Make an informed decision: compare insurance rates today

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