What happens when a car owner dies?

What happens to car insurance when the owner dies?

The co-owner of the car (if there is one) or executor/administrator of the deceased's estate may need to notify the insurance company about the death. Typically, they may need to provide the insurer a copy of the death certificate to terminate the policy or transfer it (for example, in the case of a spouse who co-owns the car and is now considered the new driver/owner).

Auto insurance policies vary, so it's important to determine what steps are needed to take with the insurer. Sometimes, a surviving spouse or estate executor will inherit an auto policy that continues after the driver dies. In this case, the policy should specify which driver is covered. Since the policyholder is changing, the car insurance premium and discounts could also change.

How to transfer a car title when the owner dies

The transfer process depends on several factors, including specific state rules and regulations, as well as:

• If the vehicle is jointly owned and the title has two names, the surviving owner can transfer the title, such as in the case of a spouse with joint ownership
• If the car isn't jointly owned, transferring the title to a new owner may take more time depending on whether the deceased owner had a will or died intestate (without a will)
• If the deceased owner had a will, the car may be passed to a beneficiary, according to the person's wishes
• In some cases, the will may include a transfer-on-death or TOD, which makes the title transfer easier (however, not all states allow the use of TOD)
• If the estate goes through a state probate court, transferring a title can't be complete until the probate process is complete

Once the co-owner, executor, or beneficiary has the "green light" to transfer the car title, the next step is gathering required documents:

• Copy of the death certificate
• Certificate of the title
• If in probate, an order from the court authorizing transfer of the vehicle
• Odometer disclosure statement
• Transfer on death form if allowed in your state

Does the DMV know when someone dies?

Typically, a DMV will get notified after Social Security is informed about the death. Some states have a vital records department that notifies their DMV about a driver's death so that their license gets canceled automatically. However, in states without this notification process, a survivor needs to terminate the license. Doing this as soon as possible can help prevent possible identity theft.

Canceling the driver's license usually includes contacting the DMV and showing an official death certificate. You might need to make an in-person appointment, although many states will let you complete the cancellation by mail. Check with your state's DMV to find out which forms and documentation you need to complete.

What if there's a loan on the car?

The loan will still need to be paid off. The deceased car owner's estate may cover the outstanding debt. However, it may also depend on the terms of the loan and state laws. An auto loan may have a death clause section, which outlines how the loan will need to be paid when a borrower dies.

If the loan has a co-signer, that person will need to assume the payments if the estate can't pay it off. If there's a surviving spouse, they're generally only responsible if they're a co-signer on the loan.

Can you legally drive a deceased person’s car?

If the estate is still going through probate court, the executor or administrator of the estate must give permission to the person who wants to drive the car. Of course, the driver needs a valid driver's license and must have auto insurance.

How to sell the car of a deceased person

If a car is owned by two people, the surviving co-owner should be able to take full legal ownership without many complications and then sell the car. If the deceased car owner has a will, but there is no beneficiary for the car, the executor should be able to sell the vehicle and move the funds from the sale to the deceased owner's estate. If a co-owner, executor, or beneficiary can proceed with a sale:

• They need to contact the state's DMV and have the car title transferred
• The seller needs to find out what paperwork and fees the DMV requires before any sale
• The seller signs the title with their name and/or role as the deceased person's executor
• Transferring the title is then up to the new buyer