Life Changes: When a Named Insured Passes Away

Someone passing away is never an easy situation.  Relatives or executors are tasked with handling everything from burial/funeral/memorial planning to resolving financial issues all while grieving; which makes the duty to think of everything that needs to be done…difficult.  One thing that can easily slip through the cracks is a person’s insurance. When your agency receives those calls advising a named insured has passed away, you should be prepared to address each carrier’s coverage limitations for the insured.  Here are some general rules of thumb in the event of a client death:

• Offer condolences for their loss.
• Inquire as to the date of the death:
  • If death was more than 30 days in the past, ask if they can send you a copy of the death certificate; carriers will most likely require this.
  • If death was fewer than 30 days in the past, death certificate may or may not be required in order to remove a named insured from a policy depending upon each carrier.
• Inquire if it is known how the home and auto are to be handled:
  • How are or will the home and auto be titled due to this death?
    • Are the home and auto titled in an individual name, trust or LLC?
  • Are there plans to sell or transfer ownership of the home/auto and what are they?
    • If there are plans to sell a home most carriers will allow coverage to remain as is for the remainder of that policy term – or up to 1 year of coverage after the death.
    • After that, coverage will have to be rewritten to a dwelling fire if rented out or a vacant home policy if no one is currently living there.
    • Be sensitive to the opportunity for cross sell coverage for their new residence or the new owner of the asset.
  • Who is the executor of the estate – who will handle the insurance matters now?
  • Check to see if the mailing address for the policies needs to be updated for future updates, cancellations, or refunds that may be sent from the carrier.

How will the insurance policies now need to be updated?

• If a spouse/partner dies leaving a widow(er) behind
  • Update the policies to show the surviving spouse/partner name as the only named insured – making sure this change agrees with how the home and auto are titled and meeting carrier specific requirements.
    • This is also why we highly recommend you always list both spouses/partners as insured and co-insured on a policy. In the event of death updating the named insured on the policy is a much smoother process.
  • For Auto policies – contact the carrier to see if they offer special rating for the widow(er) – some carriers will increase the premium due to multi-driver discount being removed upon an insured’s death, but they may offer special manual rating so the widow(er) is not penalized in premium due to a death in the family.
• If named insured dies and there is no spouse/partner living to inherit assets:
  • Update mailing address for policies to executor.
  • Depending on how titling/ownership is to be changed, policies will need to be rewritten in the name of a new named insured or at least cancelled depending on plans for the assets.

No matter what the situation is, death is hard.  We need to try and make this process with insurance as easy for the surviving family members as possible.  Feel free to contact your underwriters directly to find out carrier specific requirements in the event of death.