CE
Licensed insurance agent
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Thinking about car insurance after death is challenging since you’re already dealing with so much. After the passing of a loved one, it will probably zap all your energy just to make funeral arrangements, claim your loved one’s life insurance coverage, review their homeowner's policy, and tidy up any other loose ends. You may easily forget all about your beloved family member’s vehicle and the need to take care of their car insurance.
Technically, the car insurance policy will no longer be valid after the policyholder passes away. However, if there’s another person named on the policy, then the insurance carrier will usually be glad to help the other driver transfer the coverage into their own name. You can either check the declaration page of the insurance policy or the auto insurance ID cards for a list of covered drivers.
When in doubt, it’s always a good idea to contact the insurance company or insurance agent for help in figuring out what to do. In addition, you’ll be able to find all the necessary contact information by checking your loved one’s insurance policy forms.
It’s important that family members don’t keep car insurance active under the name of the deceased driver. That’s because only a policyholder is allowed to give permission for someone else to drive their vehicle. If the policyholder is deceased, then they can’t give legal consent for anyone else to use their car.
If you decide to let the auto insurance continue under the deceased driver’s name, you could be in an awful situation later. Any claims that are submitted after the policyholder dies will ultimately be rejected.
That could result in you being responsible for thousands of dollars in damages after being in an accident. Not to mention that submitting a claim after the driver dies could lead you to being charged with insurance fraud.
Plus, only policyholders are authorized to make changes to their coverage or view specific insurance documents. To avoid any future hassles, it’s best for the deceased’s executor to follow the suggestions below.
If the insured car is not going to be used, then the car insurance should be cancelled. After the policy is terminated, the license plate and registration tags should be surrendered to the local state Department of Motor Vehicles (DMV) office.
If the insured car is going to be used, then the estate’s legal administrator or executor must have the vehicle registration officially transferred to his/her name. The deceased’s heir will also need to get car insurance under his/her own name.
Keep in mind, before any of these official changes are made, only the estate’s administrator will be legally allowed to drive the car for maintenance purposes. This means the spouse or estate administrator may do things like take the vehicle to the DMV or to the repair shop for service.
Although official executor type trips are legally okay, the insurance company will not cover any drivers that aren’t already named on the existing policy if they’re driving for personal pleasure or everyday commuting. In other words, everyday use, like getting to work or stopping by the grocery store, isn’t acceptable until you have the car and insurance under your own name.
If you absolutely need to drive the car, then (at the very least) be sure to buy a non-owner insurance policy that will offer you basic liability coverage. There may also be the option of getting an “extended non-owner” endorsement on the deceased driver’s policy.
You might as well talk with your insurance agent about getting life insurance for those loved one’s that’ll be responsible for funeral costs someday, as well as getting help with your family member’s auto policy.
Insurance coverage of any kind is only worthwhile if there’s an insurable interest. This basically means that the existing car insurance policy is only valuable if the deceased’s heir could face a financial loss related to the vehicle. In other words, if you don’t plan on driving the vehicle, then there’s no point in keeping the coverage active.
There are specific things you can do to change or cancel car insurance after a loved one passes away. Check out our tips below.
Most auto coverage has policy provisions that allow a surviving spouse to keep their current car insurance plan. This normally applies even if the surviving spouse wasn’t named on the original car policy. These rules are known as “the surviving spouse provision” and you will see it outlined in the deceased’s insurance paperwork. You’ll also find that the car insurer usually allows family members up to 30 days to notify them of a policyholder’s death.
The auto insurance premium may change after the deceased driver is removed from the coverage. That’s because your loved one may have had special premium discounts that you don’t qualify for any longer. Plus, auto insurance is based on unique variables like the driver’s age and driving history. It’s rare that any two people end up with the same insurance rates.
The bottom line is that no car insurance policy will outlast its drivers. In fact, auto coverage is essentially useless once the named policyholder passes away. Surviving spouses and estate executors do have a few different options as to how they can handle the auto coverage.
In the end, most people find that insurance companies do understand you’re going through a tough time and will make every effort to help you sort out the car insurance dilemma easily.
