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What Happens to Car Insurance When the Policyholder Dies?

Team AckoJan 17, 2024

All cars purchased with the intention of being driven on Indian public roads need to be insured. The car owners have two policy options: Third-party Liability Policy or a Comprehensive Policy. The car owner insures the vehicle either with the basic third-party cover or with the more extensive Comprehensive policy. The crucial point to note here is that the insurance is for the asset—the car. Thus, the answer to what happens to car insurance when the policyholder dies depends upon what happens to the car.

The policyholder’s death is a tragic event. In such cases, the policyholder’s family needs time to mourn the death and grieve. However, there comes a time when some crucial paperwork also needs to be done. Car insurance is part of such paperwork.

Read ahead to know more about the processes involved concerning a car insurance policy in the unfortunate event of the death of a policyholder. However, note that the information provided in this article is of generic nature. The transfer process and other details may vary on a case-to-case basis.

Contents

How Does Car Insurance Work after the Death of the Policyholder?
Entities Involved in Transferring Car Insurance After Death of the Policyholder:
Natural Succession for Car Insurance Transfer after Death of the Car Owner:
- 1) Death of a Spouse:
- 2) Death of Single Parent:
Crucial Points Regarding Car Insurance Transfer in case of Policyholder’s Death:
Frequently Asked Questions:

How Does Car Insurance Work after the Death of the Policyholder?

In the case where the policyholder has died, the ownership of the car will be transferred to the legal heir. Similarly, the car insurance policy (after the death of the car’s owner) will also be transferred in that person’s (legal heir) name if the policy is valid.

In a scenario where there is a time gap between such transfer and the policy’s expiry date has been crossed, the legal heir can renew the policy in their name. Such processes need to be supplemented with appropriate documentation at each stage. The legal heir must inform the insurance company at the earliest about transferring the car insurance policy after the death of the policyholder.

Entities Involved in Transferring Car Insurance After Death of the Policyholder:

A basic car insurance contract involves the policyholder and the insurance company if it is purchased directly. In case of an offline purchase, the car dealer or an agent will act as a facilitator. However, other parties get involved in the case of transferring car insurance after the death of the policyholder. Here is a list of such prominent entities.

1) Insurance Company

The insurance company must be informed about the death of the policyholder as soon as possible. They will have to modify policy details and other related information at their end because of the death.

2) Legal Heir

If the policyholder has specified a nominee while availing the policy, the car insurance policy will be smoothly transferred to that person. In the absence of nominee details, the car insurance policy will pass on to the deceased policyholder’s legal heir after the completion of the due process.

3) Regional Transport Office

The legal heir will have to get the car’s Registration Certificate transferred from the policyholder’s name to their name. For that, the person will need to approach the Regional Transport Office (RTO) where the car was registered. For the RC transfer, the authorities might need a No Objection Certificate from the bank if it was purchased on a loan and if the instalments are pending.

Here are some of the documents that might be needed for a successful RC transfer.

Registration Certificate (Original Version)
Pollution Under Control (PUC) Certificate
Chassis imprint of the four-wheeler
Four-wheeler details and sales certificate
Valid four-wheeler insurance policy
Death Certificate of the deceased policyholder
Address and ID proofs of the legal heir
Aadhaar copy (attested)
Succession Certificate
Applicable RTO forms

Also, read: Vehicle Scrappage Policy in India

Natural Succession for Car Insurance Transfer after Death of the Car Owner:

There are two common instances of natural succession in case of the death of the policyholder. Read ahead to know about them.

1) Death of a Spouse:

In case of the death of a spouse, the partner can become the legal heir. This process becomes easier if the name of the spouse is mentioned as the nominee in case things go wrong. This can be checked by contacting the insurance company. They will confirm or deny whether the nominee details exist or not.

Documents Required

Here’s a list of some of the documents that might be asked by the insurance company to transfer the policy in the name of the policyholder’s spouse.

Policyholder’s Death Certificate
No Objection Certificate from the bank if applicable
Applicable Regional Transport Office forms
Original Registration Certificate
Succession Certificate
Notarized affidavit mentioning the transfer of the insurance policy to the successor’s name
Original car insurance policy
Pollution Under Control (PUC) Certificate
Marriage Certificate Copy
Self-attested Aadhaar copy

2) Death of Single Parent:

If the policyholder was a single parent, then the natural succession would lead to the policyholder’s children. If there are more than one kid, then the sibling chosen as the legal heir via the due process should approach the insurance company and get the changes done.

Documents Required

Here’s a list of some of the documents that might be asked by the insurance company to transfer the policy in the name of the policyholder’s child.

Policyholder’s Death Certificate
No Objection Certificate from the bank if applicable
Applicable Regional Transport Office forms
Original Registration Certificate
Succession Certificate
Original car insurance policy
Pollution Under Control (PUC) Certificate
Self-attested Aadhaar copy

Also, read: How To Find My Car Insurance Policy Number

Crucial Points Regarding Car Insurance Transfer in case of Policyholder’s Death:

Listed below are some important points to keep in mind regarding car insurance transfer.

Determine the legal heir without conflict.
Contact the car insurance company for a change of name in the policy at the earliest.
Approach the local RTO for transferring the RC at the earliest.
Keep all the necessary documents handy.
Do not drive the vehicle if the insurance policy has expired.
Seek a professional lawyer’s help if required.

Also, read: New car insurance

Frequently Asked Questions:

This section is about common questions related to what happens to the car insurance policy after the death of the policyholder. The questions and answers mentioned below are meant for informational purposes. The answers to some of the questions might vary based on the intricacies of the case.

Is changing the deceased policyholder’s name in the vehicle’s Registration Certificate necessary?

The Registration Certificate is considered as one of the proofs of ownership. Therefore, it becomes necessary for the new owner’s name to appear in it. That is why RC transfer is an important process in the sale of a second-hand car and other such processes.

Is it necessary to approach a lawyer to transfer the vehicle and insurance in the name of the legal heir if the policyholder dies an untimely death?

If the nominee details are mentioned and there is no conflict in determining the legal heir, then the vehicle and insurance policy transfer process can happen smoothly without availing the services of a lawyer. You might still need to contact a lawyer for making an affidavit if required.

What happens in the case if there is no stated legal heir in the form of a spouse or children?

If the deceased policyholder does not have a legal heir in the form of a spouse or children, then the policyholder’s blood relative can assume ownership after providing all the necessary documents to prove the relationship and claim the asset and its related documents.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.

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