After someone passes away, their car insurance policy will need to be canceled, but it does not happen automatically. And canceling a car insurance policy when the policyholder passes away may be more challenging than you imagine. The process depends on a few things, including whether or not you are related to the policyholder.
What happens to a car insurance policy after the policyholder dies?
After a person dies, their car insurance policy will need to be canceled, or they will need to be removed from the policy if there are other drivers on it.
One of the misconceptions around car insurance is that if the primary policyholder passes away, their policy will be automatically canceled, and the coverage will stop. Unfortunately, the insurance company has no way of knowing that a policyholder has passed away until a spouse or relative notifies them and requests to cancel the policy.
If you need to terminate a car insurance policy for someone who has passed away, the process is usually easier if you are a spouse or a driver insured on their policy. However, if you are unrelated to the policyholder or are the executor of that person’s estate but not a spouse, you will probably find that canceling their policy is a lengthier process.
Closing a car insurance policy for a spouse
If your spouse has passed away and you want to cancel their car insurance policy, the process should be relatively straightforward. Keep in mind that you will most likely still need to submit documentation to complete the process. Here are the basic steps to follow:
- Call the insurance company: Contact the insurance company and let them know that the policyholder has passed away and that you would like to cancel their policy. If you are also insured on the policy, they may ask if you want to keep the policy and become the primary policyholder.
- Provide documentation: The insurance company will probably ask to see documentation verifying the policyholder’s death, like a death certificate or an executor of estate form. If you have to provide any other forms, the insurance company will explain what they need.
- Wait for confirmation: Typically, an insurance company can formally cancel the policy within one day. The last step is to wait for the cancellation confirmation. You may also receive some compensation from the insurance company if you have already paid that month’s premium.
Closing a car insurance policy for someone other than a spouse
Canceling a car insurance policy for a policyholder that you are not related to can be more challenging. However, if you are the executor of their estate or are a friend or relative, you should still be able to cancel their car insurance. Here is what you should do:
- Call the insurance company: Call the insurance company, explain who you are and let them know that you would like to cancel the policy for someone who has passed away. You may need to present certain information, like the policyholder’s social security number or personal information, to prove that you are not a stranger trying to commit fraud.
- Provide documentation: Whether you are related to the policyholder or not, you will likely still need to provide documentation to prove that the insured person has passed away and that you are legally allowed to close their policy. As someone who is not related, there may be additional information you are required to provide.
- Wait for confirmation: Cancelling an insurance policy for someone you are not related to may take slightly longer because the insurance provider will need to verify your status as the estate executor. If the policyholder is entitled to any money from past premiums, it will likely go directly into their estate.
What happens to open claims if a car insurance policyholder dies
If the policyholder passes away while they have an open claim, you can still go through the process of canceling the policy. The insurance company will continue the claim process through to settlement even if the policy is no longer active.
However, keep in mind that the policyholder may still have a deductible taken from the claim payout or other out-of-pocket costs once the claim is settled. If the policyholder has passed away, their estate will be responsible for paying the amount owed.
Frequently asked questions
What is the best car insurance company?
There is not a single best car insurance company for every driver. It depends on what you value most in an insurance company, like cheap rates, good customer service, specific coverage options or something else. You should shop around and compare providers using your own criteria to find the best insurer and the best car insurance rate.
If my spouse dies, will I have to get a new car insurance policy?
Not necessarily. If you were both insured on the same policy, you can likely ask your insurance company to remove your spouse and add your name as the main policyholder. You would then become responsible for paying the premiums if you weren’t already.
Will a car insurance company issue a refund if the policyholder dies?
Depending on your insurance company and when you cancel the policy, the policyholder may be entitled to some money. Typically, the compensation would come in the form of a returned premium. For instance, if the monthly premium was paid on January 1st and you cancel the policy on January 3rd, you may get back a portion of that month’s premium. Every insurance company is different, and so are the rules that govern those companies in every state. Talk to an insurance agent at the deceased person’s insurance company to find out if there will be any refunds.
If my relative passes away, can I still drive their car?
Yes, you are legally allowed to drive someone’s car if they have passed away. However, you will need to get your own auto insurance policy on that vehicle. Keep in mind that you cannot legally take ownership of a deceased person’s vehicle until the title is transferred and put into your name.
How long can I stay on my parents’ car insurance policy if they die?
If you live at home and your parents pass away, you can technically no longer stay on their policy. You would need to contact the insurance provider and cancel the policy or remove them from it. After that, you would likely need to open a new policy in your name, unless you can take over as the main policyholder on their existing policy.