Driving with insurance is mandatory in India. Car owners mainly have two options when opting for a policy; they are a third party liability cover and a comprehensive policy. While the third party will cover damages done to others, a comprehensive cover will cover damages done to your car as well. While answering the question of what happens to car insurance when the owner dies, it is necessary to keep in mind that the car is insured. Thus, the answer depends on what happens to the car when the owner dies.
Death is a tragic loss. The family does need some time to mourn and recover from the loss. However, there is a lot of paperwork needed after death. Car insurance is part of this paper works. Invest in a regular car insurance policy to enjoy benefits and smooth transfer and settlement process.
Working of car insurance after the death of the Policy Holder
In case of death of the policyholder, the ownership of the car will be transferred to the legal heir. Similarly, the policy will also be transferred to the legal heir if the policy is valid. In cases where the policy has expired due to the time taken, the heir can renew under their name. Proper documentation is needed at each stage for the transfer of the policy timely and accurately.
Entities involved in policy transfer after the death of the owner
Basic car insurance involves the insurance firm and the policyholder, if you get the policy from a dealer, then it might also include a third party agent. However, when transferring insurance, other parties also get involved in the process.
1. Insurance Company
The insurance company must be informed about the death of the policyholder so that the process of transferring the policy could be started. It is needed to modify all the details regarding the policy because of the untimely death.
2. Legal Heir
If the policyholder has opted for a nominee while getting the policy, it would smoothly be transferred to them after the death of the policyholder. In the absence of the nominee's detail, the insurance policy will pass on to the legal heir of the deceased after some paperwork.
3. RTO
The legal heir will give their name to the RTO for registration of the car under their name. The certificate will be transferred to their name at RTO and after that, the process of transferring policy can begin. In case, the vehicle was purchased on a loan and the instalments are pending then the authorities might need a no-objection certificate from the bank.
In case of death of the spouse, the partner becomes the legal heir for the ownership.
In the case of single-parent, the policy and car ownership will be transferred to the child.
In case of more than one child, the child chosen as a legal heir would be benefitted through the policy.
Renew
motor insurance now if it has expired recently to continue driving on road safety.