Although there are clear laws and procedures in place to deal with a deceased person's accounts when he dies, there is often confusion when those laws and procedures actually go into action. This is due to a combination of slow bureaucratic process and responsible individuals who are too grief-stricken to efficiently navigate a complex process. The home and auto insurance of the deceased is one such process.
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Contact the Company
The next of kin should contact the deceased's insurance company in a timely manner and inform them of the situation. Each insurance company will then activate its policies to allow whoever has inherited the property to make decisions about the policy. Although the companies would love for you to continue doing business with them, it's your right to move coverage to your own insurance company.
Proof of Death
In the absence of a power of attorney document, as next of kin you will need to provide the companies covering the deceased's home and auto with proof of his death. Once you establish he has died, and that you have the right to make decisions about his accounts, they will work with you to close or change ownership of the account. If the estate has an executor, he automatically has permission to make the decisions and changes, typically until the original policy is cancelled or replaced.
If you take no action regarding the auto and home insurance for the deceased, the company will continue to bill for the policies. If on an automatic draft, it will keep billing until the funding account is closed or drawn down to insufficient funds. If on mailed bills, you will start receiving collection notices. Either way, the insurance company will cancel the policy after the first missed payment. As of that point, the auto and home are no longer insured.
There's not usually much harm in letting the insurance on a deceased person's property simply cancel on their own, and setting up your own insurance once you take possession. However, there is a window of risk to be careful of. If the probate on the will takes long enough, you may not receive possession of an auto or home until some months after the insurance has cancelled from non-payment. If the property is damaged during that time, you will receive no payment to help with the repairs or replacement.
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