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Caring For Generations

When a Policyholder Dies, Does the Insurance Die, Too?

On Behalf of | Jun 26, 2019 | Estate Planning

When a person dies, there seem to be hundreds of details that need attention by family members and legal representatives. For instance, what do heirs need to do about that person’s homeowner’s and auto insurance policies?

The answer, explains, depends on three factors:

  • the policy
  • the insurance company
  • state regulations

A surviving spouse, if there is one, is usually allowed to maintain the homeowner’s and auto policies, changing the named insured. If the home passes to an adult child or other person, on the other hand, a new policy will need to be issued.

What about a single person who dies owning a car? The legal representative, who is responsible for preserving the estate assets, can drive the car, but only for maintenance purposes. In contrast, if a second driver is listed on the policy, that person may be able to drive and be covered by the insurance up until the policy renewal date.

If the title of a vehicle needs to be transferred, it’s important to contact the Indiana Department of Motor Vehicles, making sure to have the proper documentation ready to show. Remember, in cases where the policyholder was not married at the time of death, the coverage does not transfer automatically to the legal representative. In all cases, cautions, you should never assume that coverage will automatically be extended – always best to check with the insurance agent.

Insurance policies are just one aspect of estate administration, which involves:

  1. gathering all the property
  2. distributing the assets according to the deceased’s wishes
  3. paying debts

Because serving as executor of an estate can be so time-consuming and stressful, at Geyer Law, we are often asked to assume those responsibilities on behalf of the heirs. That way, they can avoid mistakes, and focus on moving forward with their own lives.

– by Rebecca W. Geyer