What Will Car Insurance Pay for After Death in a Car Accident?

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Rachel Bodine graduated from college with a BA in English. She works as an associate editor and writer for 4autoinsurancequote.com for over a year and enjoys creating content that offers expert advice on car insurance topics.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs...

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Reviewed byLeslie Kasperowicz
Former Farmers Insurance CSRhttps://res.cloudinary.com/quotellc/image/upload/insurance-site-images/4autoins-live/6ea5d860-leslie-kasperowicz.jpg

UPDATED: Mar 13, 2020

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According to the IIHS, there were 37,133 fatalities from motor vehicle crashes in the United States in 2017. Every year, thousands of drivers lose their lives in vehicle accidents. Most people know that car insurance covers certain medical expenses. However, car insurance can also provide certain death benefits.

What will car insurance pay for after death in a car accident? Will car insurance cover funeral expenses? How do car insurance death benefits work? Today, we’re answering all your questions about how car insurance pays out death benefits after a fatal accident.

Some Car Insurance Policies Include Death Benefits to Cover Certain Expenses

car accident death auto insuranceYour car insurance policy might have certain death benefits listed. A car insurance policy that includes death benefits may cover the cost of a funeral and other expenses.

However, car insurance death benefits will only be paid out when the death clearly occurred as a result of a car accident. Car insurance companies may require an autopsy to verify that they need to pay death benefits.

Additionally, death benefits are optional in most states. If you live in a no-fault state that requires personal injury protection (PIP) coverage, then death benefits may be automatically included in your policy. 12 states in America are no-fault states. Drivers in all other states, however, may have no death benefits in their policies whatsoever.

If your loved one was killed by an at-fault driver, then you may be able to pursue certain death benefits from the at-fault driver’s insurance company. If the other driver was uninsured or had too little insurance, then you may also be able to make a claim under the deceased driver’s uninsured or underinsured motorist coverage.

If the death occurred as a result of someone else’s negligence, meanwhile, then you may choose to file a wrongful death claim by working with a car accident attorney.

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Who Can Receive Death Benefits from Car Insurance?

Typically, your insurance policy will clearly list who can receive death benefits after an accident, including:

  • Your surviving spouse, assuming the spouse is a resident of the same household as the deceased at the time of the accident
  • Parents of the deceased if the deceased is a minor and is living with their parents at the time of the accident
  • The estate of the insured person (if neither of the above applies)

Essentially, death benefits flow to a surviving spouse, the surviving parents of a minor, or the estate of the deceased individual.

Additionally, death benefits are only paid when one of the individuals listed on the declarations page of the car insurance policy dies. A car insurance company is only required to pay death benefits when the individual who died is specifically listed on the policy.

What Do Car Insurance Death Benefits Cover?

Car insurance death benefits will typically cover death-related expenses up to a certain limit. Some of the things that can be covered by death benefits include:

Some states ignore coverage limits with death benefits. If your car insurance policy’s medical coverage has already been used up, for example, then you would not ordinarily be able to claim more money from your insurance company. Some states make an exception for funeral expenses and death benefits, however, allowing policyholders to get paid even if their coverage has been used up.

Additionally, not all states require insurance companies to cover the loss of wages. Typically, no-fault states require insurance companies to compensate for lost wages as part of the car insurance policy’s death benefits. In most states, however, loss of wages is not part of a death benefits payout from the insurance company (although it may be claimed in a wrongful death suit).

What is Not Covered By Car Insurance Death Benefits?

Certain expenses are not covered by car insurance death benefits, including:

  • Death of an individual who was not named on the insurance policy’s declarations page
  • Deaths that occur from injuries sustained in the course of the insured person’s occupation, although there are certain exceptions to this rule
  • Deaths that occur from a disease that has nothing to do with the accident
  • Deaths that occur from suicide, war, accidents with farm vehicles or trains on private roads, or accidents caused during a race

Again, the insurance company may require an autopsy to verify that the cause of death falls under your car insurance coverage. If the death meets any of the above requirements, then it may not be covered under traditional car insurance death benefits.

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Some car insurance policies come with death benefits. In no-fault states, death benefits are included by law with all insurance policies as part of personal injury protection coverage. In most states, however, death benefits are considered optional.

If you do have car insurance death benefits, then these benefits can cover certain related expenses, including funeral expenses, medical bills, and loss of income.

If your loved one was killed in an accident where someone else was at-fault, then you may be able to seek compensation through the insurance company of the other driver. You may also be able to sue the other driver for damages.

Ultimately, car insurance death benefits can be complicated. Consider speaking with a car insurance attorney to understand your options when it comes to claiming death benefits after a car accident.

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