When a loved one dies, organizing their problems can be a complicated process. In addition to closing your bank account and carrying out your will, you will also need to cancel your car insurance and other insurance. In this guide we will share what happens to your car insurance when someone dies and show you how to cancel your car insurance for the deceased’s loved one, whether it’s your spouse, parent, or someone else.
What happens to car insurance after the policyholder dies?
One misconception about auto insurance is that if a major policyholder dies, the policy will automatically be cancelled and coverage will be suspended. Unfortunately, the insurance company has no way of knowing that the policyholder has passed away until the spouse or relative notifies them and requests them to cancel the policy. You will need to cancel your car insurance after the major policyholder dies. Otherwise, you will need to remove the name from the contract if there are other drivers.
If you need to terminate your car insurance for someone who has passed away, if you are a spouse or driver insured by their policies, the process is usually simple. However, if you are unrelated to the policyholder or are the executor of that person’s property but not the spouse, you will probably find that canceling their policy is a longer process.
Close car insurance for your spouse
If your spouse dies, canceling your car insurance is a relatively simple process. To complete the process, you will likely need to submit a document proof of the policyholder’s death.
The basic steps to follow are:
- Call your insurance company: Contact your insurance company or your agent to let them know that the policyholder has passed away and that you would like to cancel their insurance. If you are also insured with policies, they may ask if you want to maintain the policy and become a major policyholder.
- Documentation provided: Insurance companies will ask you to look at documents confirming the policyholder’s death, like the executor of death certificates and real estate forms. If you need to provide other forms, the insurance company will explain what you need.
- Waiting for confirmation: Insurers can generally formally cancel their policies within one day. The final step is to wait for cancellation confirmation. You can also get some refunds from your insurance company if you have already paid monthly, six months or annual premiums.
If my spouse dies, should I get new car insurance?
If your spouse dies, you may be able to maintain your car insurance, but in some cases you may need to get a new car insurance. For example, if both have the same insurance, you can ask the insurance company to remove your spouse and maintain it as a primary policyholder. After that, you are still responsible for paying the premium. When you update an existing policy, one driver is listed and reevaluated. This could mean premium reductions.
If you haven’t already taken vehicle insurance or titles, you may need to get new car insurance. To find out what the best approach for your situation is, it may be beneficial to reach out to your insurance company or agent, explain the situation, and provide a solution based on the title owner of the registered vehicle and the details of the current policy.
Close your car insurance for someone other than your spouse
Cancelling your car insurance for a policyholder you are not involved can be more difficult. However, even if you are the executor of their property, or a friend or relative, you should be able to cancel your car insurance if you can prove your relationship with the deceased policyholder. Here are a few steps you can take:
- Call your insurance company: Call your insurance company or your agent to let them know that you want to cancel your insurance for the deceased. You may need to provide certain information, such as the policyholder’s Social Security Number or personal information.
- Documentation provided: Whether you are involved with the policyholder or not, you will need to provide documentation to prove that the insured has passed away and you will need to prove that you are legally permitted to close their policies. As someone who is not involved, there may be additional information that you need to provide.
- Waiting for confirmation: It may take a little time to cancel insurance policies for people you are not involved, as the insurance company needs to check your status as a real estate executor. If policyholders are entitled to money from past premiums, it will likely go directly into their property.
What happens when a car insurance policyholder dies?
You can still carry out the process of cancelling your policy if the policyholder dies while having an open claim. Insurers will continue their claims process until settling, even if their insurance is no longer aggressive.
However, please note that policyholders may still have deductions taken from claim payments or other out-of-pocket expenses after the claim is resolved. If the policyholder dies, their property is liable to pay the amount outstanding.
Will the car insurance company issue a refund if the policyholder dies?
In some cases, the deceased insurance company will refund unused premiums after the policy is cancelled. This usually happens when the policyholder paid the annual premium in advance and paid it in full, and the policy was still active when he died. Insurers may offer a refund if the policy is paid monthly and cancel by the end of the month.
For example, if you pay monthly premiums on January 1st and cancel your policy on January 3rd, you can recoup a portion of your premiums for that month. All insurance companies are different and the rules governing insurance companies in all states are different. Consult with the insurance agent or company representative of the deceased insurance company to see if there is a refund.
