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

In most cases, auto insurance will pay for death benefits after death in a car accident, including medical bills and funeral expenses. The death must be a direct result of the car accident in order for auto insurance to pay out death benefits. In no-fault states, death benefits are often included in your personal injury protection policy. Read your auto insurance policy closely to see exactly what your auto insurance will pay for after death in a car accident.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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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. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Former Farmers Insurance CSR

UPDATED: Jan 10, 2021

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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 auto insurance covers certain medical expenses. However, auto insurance can also provide certain death benefits.

  • What will auto insurance pay for after death in a car accident?
  • Will auto insurance cover funeral expenses?
  • How do auto insurance death benefits work?

Today, we’re answering all your questions about how auto insurance pays out death benefits after a fatal accident. Payouts can range from big to not at all.

If you’re ready to start searching for auto insurance companies right away, check out our breakdown of the best auto insurance companies in 2021.

Let’s get started.

Some Auto Insurance Policies Include Death Benefits to Cover Certain Expenses

Your auto insurance policy might have certain death benefits listed. An auto insurance policy that includes death benefits may cover the cost of a funeral and other expenses.

However, auto insurance death benefits will only be paid out when the death clearly occurred as a result of a car accident. Auto 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 Auto 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 auto insurance policy dies. An auto insurance company is only required to pay death benefits when the individual who died is specifically listed on the policy.

Death benefits can have an impact on auto insurance rates as well. Generally, states where auto insurance companies have to pay more out in claims often have higher auto insurance rates.

An example of this is the list of the 10 states with the most fatal crashes. States like Louisiana, Georgia, and Florida have higher than average auto insurance rates. Sometimes, like in Louisiana, auto insurance rates can be among the highest in the country.

What Do Auto Insurance Death Benefits Cover?

Auto 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 auto 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 auto 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 Auto Insurance Death Benefits?

Certain expenses are not covered by auto 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 auto insurance coverage. If the death meets any of the above requirements, then it may not be covered under traditional auto insurance death benefits.

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Conclusion

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

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