What happens to car insurance if someone dies? (2022)

Key takeaways...

  • In states where auto insurance is required, it’s the vehicle owner’s responsibility to carry insurance in their name
  • If the vehicle owner passes away, the person in charge of the estate should keep the policy in the owner’s name until they change ownership with the DMV or there could be penalties
  • If a spouse dies, property insurance policies have special provisions that automatically provide coverage to the surviving spouse until the policy is up for renewal
  • If a single policyholder dies, the executor of the estate is covered under the policy to drive the covered property for maintenance purposes or to handle estate issues
  • The executor isn’t covered to drive the vehicle for personal use unless they were already listed as a driver under the car’s policy

When someone you love passes away, one of the last things that you’re prepared to deal with is property insurance. After you take care of the funeral arrangements and you have a minimal amount of time to grieve, you’re left taking care of the business matters that come with the passing of a loved one.

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One of the business matters that you’ll be in charge of as the executor of the estate is dealing with existing auto insurance policies and property ownership transfers.

If you take missteps as you’re handling your end of things, you could make some very expensive mistakes that affect several people. Here’s what you need to know about car insurance contacts after the policyholder dies.

Table of Contents

Why Insurance is Mandatory in most States

What happens to car insurance if someone dies? (1)

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Every state has either a financial responsibility system or a mandatory insurance system in place to that property owners are able to pay for damages that they’re liable for.

Since liability plays a huge role in who’s held accountable for paying for medical bills and repairs in tort states, maintaining insurance is a must.

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The Importance of Insurance for Future Registration and Titling Purposes

Even though more than one person might have a financial interest in the car, it’s the registered owner’s responsibility to keep insurance active at all times. If the registered owner passes away, the responsibility passes on to their heir.

Keep the policy in the registered owner’s name until changes are made official through the DMV.

It’s tempting to cancel the deceased’s policyholder quickly following their death when the vehicle isn’t being operated, but doing this will pose problems in the future when you want to make changes to the title or when you want to name a new registered owner.

Since there are penalties for letting the insurance lapse, the fines could transfer over and make changing ownership very expensive and very difficult.

What type of penalties could there be if you cancel the coverage?

You’ll face direct and indirect consequences for canceling the car’s insurance too early without getting advice from a law expert or an insurance expert.

Whoever ends up taking possession of the asset is the one who’s going to get stuck paying the price. In many instances, that someone is you. Here’s a list of those penalties:

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  • Electronic reporting shows an insurance lapse and the registration is suspended
  • You’re ordered to pay a fine for lapsed insurance and a fee to reinstate the registration before the car can legally be operated
  • If you drive the vehicle while the plates are suspended, you could face a driving without insurance charge or vehicle impoundment
  • Since impound yards have very strict rules regarding who a car can be released to, the car may be in storage racking up fees for weeks until you can gather your documents
  • You may be ordered to appear in court for being uninsured where you could be assessed a community service requirement
  • The driving without insurance conviction will remain on your driving record and could affect your personal insurance status

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Are there auto insurance contract provisions that deal with death?

You know not to remove coverage from the vehicle, but do you really understand the contract provisions that deal with the death of an insured?

Insurance companies are prepared to deal with some of the most complex situations. Some of these scenarios involve a deceased vehicle owner and extending coverage to another party.

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How does the auto insurance contract work when there’s a surviving spouse?

What happens to car insurance if someone dies? (5)

If the named insurance passes and they were married at the time of their death, the surviving spouse may have coverage under the policy for a limited amount of time.

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In most cases, the contract says it’s the spouse’s duty to notify the company within 30 days of the named insured’s passing.

As long as the spouse notifies the insurance company in a timely manner, coverage will extend to the spouse while they drive the vehicle.

The coverage is extended to the spouse for the remainder of the term without changing the risk. If the spouse wants to maintain coverage at renewal, they must have a policy written in their name.

What happens when a single policyholder dies?

When an unmarried named insured passes, the situation gets a little harrier. Since there’s no spouse with an automatic insurable interest in the property, the company must put limitations on who is covered and how they are covered.

This is true even when the person handling the policy is the executor of the estate.

The legal representative handling your estate or your trust is covered when they’re driving your vehicle as long as they have the official documentation.

Unfortunately, if the representative isn’t already a listed driver on the policy, there are some major driving restrictions.

What are the restrictions for executors?

What happens to car insurance if someone dies? (6)

Whether or not you were a listed driver on the policy before the named insured’s death is a huge deal. If you didn’t live in the home and there was no need for you to drive the car, you won’t be free to drive the car for just any reason. Here are some of the reasons that you can drive:

  • You are taking the vehicle to get maintenance done
  • You are taking the vehicle to the DMV
  • You are going to a mechanic to get repairs
  • The purpose of your drive is to preserve the asset in some way
  • You’re going to court to handle the estate

It can take years to settle an estate in probate court. Until it’s settled, it’s difficult totransfer ownership of property. Before you assume that you’re covered to drive a car that you’ve inherited, check with the company.

Being given permission in the past doesn’t mean that permission is still valid.

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It’s your responsibility to transfer the title and registration in your name. When you do this, it’s your job to buy insurance that satisfies state law. You can add the vehicle to your policy or shop around to find a better rate elsewhere.

If you’re shopping, don’t forget to use a comparison quote tool online for convenience. Enter your zip code in our FREE tool below to compare car insurance rates instantly!

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Licensed Agent for 15 YearsWhat happens to car insurance if someone dies? (7)

Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Former Auto Insurance Claims Manager What happens to car insurance if someone dies? (8)

FAQs

What happens when a policyholder dies? ›

When the primary home insurance policyholder dies, their insurance policy doesn't automatically terminate. For coverage to continue, the estate must continue to pay the deceased's insurance premiums. Like car insurance, home insurance policies can be cancelled at any time with a cancellation notice.

How long does it take to investigate a car insurance claim? ›

How Long Does an Insurance Claim Investigation Take? After filing a claim for property or car insurance, expect to hear from the insurance adjuster within one to three days. It may take longer if the adjuster has to inspect the alleged damage.

Can anyone drive my car? ›

Can I get insurance for anyone to drive my car? An 'any driver' insurance policy allows anyone to drive your car at any time. There's no limit to how many people can drive the car, so any friends or family, who have your permission, are legally insured to drive it.

Can an executor sell car before probate? ›

A motor vehicle is a chattel and you do not have to wait until a grant of probate or letters of administration have been issued to be able to transfer a car to another owner or to sell it.

Is car insurance valid if the owner has died? ›

Car insurance

Most policies terminate on the death of the main policy holder, and this will leave you uninsured. You don't have to use the same company. Shop around to find one that gives you the best deal. Be aware that need to the car insurance if you want to continue driving a car.

How do insurance companies know when someone dies? ›

Life insurance companies typically do not know when a policyholder dies until they are informed of his or her death, usually by the policy's beneficiary. Even if a policy is in a premium-paying stage and the payments stop, the insurance company has no reason to assume that the insured has died.

Do insurance companies always investigate claims? ›

Short answer: Yes, insurance companies conduct extensive investigations to avoid paying large claims. If someone else's negligence injures you, you can try to recover damages. The first step usually involves filing a claim with the at-fault party's insurance company.

What questions do insurance investigators ask? ›

Questions Insurance Adjusters Commonly Ask in Recorded Statements
  • What is your full name?
  • Are you aware that this interview is being recorded?
  • Do I have your permission to record your statement?
  • Can I share the information we discuss with another adjuster?
  • What is your address, telephone number, and date of birth?
7 Mar 2019

Do car insurance claims go to court? ›

Although most cases do not make it to court, some do. They are usually cases that fall into one of four categories – complex cases, unresponsive defendants or insurers, cases whereby the defendant is denying liability, and cases where claimants are looking for interim payments.

Will my insurance cover me if I drive someone else's car? ›

Your liability coverage will generally extend to the car, but comprehensive insurance coverage and collision insurance coverage may not. The good news is, if you're in an accident while driving a borrowed vehicle, there's a chance the owner's car insurance may provide some coverage.

Can I drive a car not registered in my name? ›

Driving an unregistered car is against the law and can result in some serious fines and an impounded vehicle. Without a valid registration, the police may question the driver's ownership of the vehicle, and an officer might assume the car is stolen.

Can I drive a uninsured car with my insurance? ›

It's illegal to drive a vehicle on a road or in a public place without at least third party insurance. Even if the vehicle itself is insured, if you're not correctly insured to drive it you could be considered to be driving without insurance and could get penalised.

Does a car come under probate? ›

A motor vehicle is a chattel and you do not have to wait until a grant of probate or letters of administration have been issued to be able to transfer a car to another owner or to sell it.

How do I transfer ownership of a deceased car? ›

Original Deed of Extrajudicial Settlement of Estate (in case the deceased is survived by two or more heirs) or Affidavit of Sole Adjudication (in case the deceased is survived by only one heir) Affidavit of publication of the deed in any newspaper of general circulation for three consecutive weeks.

What happens if the registered keeper of a car dies? ›

The Driver and Vehicle Licensing Agency (DVLA) needs to know when someone has died so they can cancel their driving licence; they will also be removed as the registered owner of the vehicle, and the car's road tax will be cancelled.

Do car insurance policies have a death benefit? ›

With car insurance, accidental death benefits (ADB) coverage pays a modest death benefit in the event of a fatal car accident. Even with its low payout, it can take some financial pressure off your family — and many companies offer it as a free perk included with your policy.

Do I have to pay my husbands credit card debt when he dies? ›

When someone dies with an unpaid debt, it's generally paid with the money or property left in the estate. If your spouse dies, you're generally not responsible for their debt, unless it's a shared debt, or you are responsible under state law.

What happens to bank loan after death? ›

As there is no collateral in place of the loan with an unsecured debt, no property of the deceased can be seized to pay the bill. Furthermore, if a debtor dies before repaying an unsecured loan, the lender cannot recover unpaid debts from the deceased's surviving partner or legal heir.

How long after death can you claim life insurance? ›

As long as the required paperwork is in order and the policy isn't being contested, a life insurance claim can often be paid within 30 days of the death of the insured. However, each claim is different and there may be state regulations that require additional processing time.

Can you withdraw money from a deceased persons account? ›

It is illegal to withdraw money from an open account of someone who has died unless you are actually named on the account before you have informed the bank of the death and been granted an order of probate from a court of competent jurisdiction.

Is there a way to check if someone has life insurance? ›

The National Association of Insurance Commissioners (NAIC) offers a free Life Policy Locator tool to help you find out if someone had life insurance. To use the tool, you'll need to provide the following information for the deceased: Social Security Number (SSN) Legal first and last name.

Can insurance companies tap your phone? ›

No, an insurance investigator cannot tap your phone – ever.

Tapping a phone involves using electronic equipment to secretly listen to someone's phone conversations, and it is illegal. However, tapping a phone should not be confused with taking a recorded statement, which many insurance companies do on a routine basis.

Can insurance companies read your text messages? ›

Insurers can go back through text threads to read previous conversations, unlike phone conversations which are not always recorded.

How do you beat an insurance adjuster? ›

Calmly and politely is the best way to approach an insurance claim dispute. First, you can write a letter to the independent adjuster explaining why you believe their total settlement is not enough compared to what you calculated. Even if you're upset, don't demonstrate it.

What should you not say to an insurance company? ›

Avoid using phrases like “it was my fault,” “I'm sorry,” or “I apologize.” Don't apologize to your insurer, the other driver, or law enforcement. Even if you are simply being polite and not intentionally admitting fault, these types of words and phrases will be used against you.

How do auto insurance companies investigate claims? ›

To protect themselves, car insurance companies will ask their insureds and third-party claimants to provide evidence to support their car accident claim, and will also send adjusters or investigators to gather their own evidence about the cause of the accident and the claimed damages or injuries.

What does it mean when your insurance claim is under investigation? ›

When an insurance company says “investigation” and you may be thinking it's an investigation to process the claim, it's really a tactic by insurance companies to evaluate you and decide how they are going to handle the claim, and how much they feel they can get away with not paying on the claim.

What is a 50/50 insurance settlement? ›

What is a 50:50 Split Liability Agreement? If an accident has occurred, whereby both parties are equally responsible, it can be determined as a 50:50 split liability. In this case, each party receives half of the money for their claim from the other party's insurance company.

How long does it take for compensation to be paid? ›

From the day your compensation amount is settled, it could take up to 28 days for you to receive your payout. But in many cases, this will be much faster. You may be able to get your compensation within just a few days after a settlement is agreed when dealing with certain insurers.

What is a Stage 3 hearing? ›

This stage involves obtaining evidence to support the compensation claim, negotiations, and settlement if possible. Stage 3. This is laid out in the Civil Procedure Rules Practice Direction 8B. It involves issuing proceedings, filing evidence at court, and getting a judge to value the claim.

Can you be on your parents car insurance if you don't live with them? ›

Most insurers will also allow children to stay on their parents' insurance policy when they move out of the family home for school. For example, say you're a student who occasionally returns home and drives a family vehicle.

Can I insure a car that is not in my name progressive? ›

Can I insure a car that's not in my name? In most states, the answer is yes. However, the vehicle must be parked regularly at your residence overnight for Progressive to insure it on your policy.

Does car insurance cover the car or the driver progressive? ›

Car insurance covers damage to your vehicle and protects you financially if you're liable for someone else's injuries or damages. Auto insurance can also pay for medical bills if you or your passengers are injured in an accident or you're hit by an uninsured or underinsured driver.

Does your car insurance and registration have to be under the same name? ›

Can the insurance and vehicle ownership be in different names? No, the insurance must be in the name of the registered owner of the vehicle. As your mother is the registered owner of the car, the insurance must be purchased in her name to ensure that there is insurable interest.

Does car insurance cover unnamed driver? ›

Named drivers will be able to make claims under the insurance plan, while unnamed drivers are usually not able to, though some insurers allow claims for unnamed drivers with an additional access. It is best to check with your insurer or the policy plan for the details.

Can I drive my dad's car? ›

You must be properly insured if you drive on the public road, no matter how short the distance, even if your parents have given their permission for you to drive the car, and even if they have their own insurance policy covering the vehicle.

What happens to cars seized for no insurance? ›

The penalty for the offence of driving a vehicle without insurance is a fixed penalty of £300 and 6 penalty points or, if the case goes to court, you could get an unlimited fine and be disqualified from driving.

Do I need to insure my car if I don't drive it? ›

No, before you drive any motor vehicle on a public road you must have valid insurance. Many providers offer temporary or short-term car insurance which would cover you for circumstances such as this. You must not drive a motor vehicle until you have insurance.

Can I insure myself to drive any car? ›

No, you generally can't insure someone else's vehicle, but you can buy a non-owner policy to insure yourself.

Can you sell a deceased car without probate? ›

A motor vehicle is a chattel and you do not have to wait until a grant of probate or letters of administration have been issued to be able to transfer a car to another owner or to sell it.

Do you need to return a driving Licence when someone dies? ›

You'll need to return the driving licence, with a covering letter explaining the circumstances and your relationship to the deceased, to the DVA. If you can't find the driving licence, they'll require a letter stating the name, address and date of birth of the deceased, and your relationship to the person.

What can you do before probate is granted? ›

Acts done before probate
  • pay or release a debt.
  • get in and receive the testator's estate.
  • assent to a legacy.
  • generally intermeddle with the testator's goods.
  • exercise commercial rent arrears recovery (formerly distrain for rent)
  • release an action.
  • make a conveyance or assignment of personalty.
8 Dec 2021

What is a 30 form? ›

APPLICATION FOR INTIMATION AND TRANSFER OF OWNERSHIP OF A MOTOR. VEHICLE. [See Rule 55 (2) and (3) ] (To be made in duplicate if the Vehicle is held under an agreement of Hire- Purchase/Lease/Hypothecation.

How do I register a car in my name? ›

You need to complete and submit the Application for Registration and Licensing of Motor Vehicle form, along with the required documents, to your nearest motor vehicle registering authority. There is a cost to register the vehicle and you will be issued with a registration certificate after settling the fee.

Where can I get an affidavit of self adjudication? ›

It is a quick and cheap way of claiming your inheritance. All you need to do is execute the Affidavit of Self-Adjudication and file it in the Office of the Register of Deeds of the place where the decedent resided.

How do I transfer ownership of a deceased car? ›

Original Deed of Extrajudicial Settlement of Estate (in case the deceased is survived by two or more heirs) or Affidavit of Sole Adjudication (in case the deceased is survived by only one heir) Affidavit of publication of the deed in any newspaper of general circulation for three consecutive weeks.

Can I sell my dad's car before probate? ›

A motor vehicle is a chattel and you do not have to wait until a grant of probate or letters of administration have been issued to be able to transfer a car to another owner or to sell it.

Can you use a deceased person's bank account to pay for their funeral? ›

Many banks have arrangements in place to help pay for funeral expenses from the deceased person's account (you should contact the bank to find out more). You may also need to get access for living expenses, at least until a social welfare payment is awarded.

What happens when the owner of a life insurance policy dies before the insured? ›

If the owner dies before the insured, the policy remains in force (because the life insured is still alive). If the policy had a contingent owner designation, the contingent owner becomes the new policy owner.

What happens to bank account when someone dies? ›

With a valid beneficiary in place, funds in a bank account go to the beneficiary. That person will need to contact the bank and provide documentation to claim funds. If the beneficiary dies before the bank account owner, the assets typically go to the deceased's estate.

How Long Does power of attorney last after death? ›

At Last, the power of attorney becomes invalid after the death of the person who is granting the power. Also, the power of attorney becomes insolvent if the agent dies, files bankruptcy, or becomes incapacitated. So the answer to the question is the power of attorney valid after death is no. Start your search NOW !

Who notifies the bank when someone dies? ›

Banks won't necessarily know that a customer has died, so it is important to notify the bank as soon as possible. Anyone can notify the bank but typically this responsibility would fall on the next of kin or the estate representatives.

Can I use my mom's debit card after she dies? ›

You cannot use your mom's debit card after she dies. Instead, you should notify the bank of her death and apply to the Surrogate's Court for approval to access her assets. After you notify the bank, they will freeze her accounts. Using the accounts without notifying the bank can be considered fraud.

How long after death are banks notified? ›

Notify insurers and creditors

Ideally, as soon as possible after receiving the death certificate, or within a month of the death.

How long do you have to cash in a life insurance policy after death? ›

There is usually no time limit on life insurance death benefits, so you don't have to worry about filling a claim too late. To file a claim, you can call the company or, in many cases, start the process online.

What happens if you don't have beneficiary? ›

Who Does Life Insurance Go to If There's No Beneficiary? If a life insurance policy has no beneficiary and the covered individual dies, the death benefit is typically paid out to the estate of the deceased. The estate consists of the sum of that person's belongings, including investments and any property they owned.

Does life insurance go to next of kin? ›

Do life insurance proceeds go to the estate or to the next of kin? The beneficiary named in the policy will receive the proceeds regardless whether he or she is next of kin or not. In case the beneficiary is deceased, the insurance company will look for primary co-beneficiaries whether they are next of kin or not.

Who owns the money in a joint bank account when one dies? ›

Broadly speaking, if the account has what is termed the “right of survivorship,” all the funds pass directly to the surviving owner. If not, the share of the account belonging to the deceased owner is distributed through his or her estate.

Does Social Security notify bank of death? ›

If a payment was issued after the person's death, Social Security will contact the bank to ask for the return of those funds. If the bank didn't already know about the person's death at that point, this request from Social Security will alert them that the account holder is no longer living.

What rights do next of kin have? ›

The term next of kin is in common use but a next of kin has no legal powers, rights or responsibilities. In particular, they cannot give consent for providing or withholding any treatment or care.

Does power of attorney override a will? ›

Can a Power of Attorney change a will? It's always best to make sure you have a will in place – especially when appointing a Power of Attorney. Your attorney can change an existing will, but only if you're not 'of sound mind' and are incapable to do it yourself. As ever, these changes should be made in your interest.

Do I need probate if I have power of attorney? ›

The simple answer is, yes, as Lasting Powers of Attorney (LPA) is only relevant when someone is alive, not after they have passed away. This is when probate comes into force.

Can a power of attorney change the executor of a will? ›

So long as a will is valid, a power of attorney cannot change it or rewrite it. This is not within their scope of authority even if the grantee specifically says otherwise in their power of attorney assignment. Any will written by a power of attorney is invalid on its face.

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