Death of a loved one and insurance: What you need to know
Losing a loved one is a devastating ordeal that can be compounded by complex administrative tasks. Here’s what you need to know about life, auto, and home insurance to help you settle a loved one’s succession.
Succession and insurance policies
The will’s liquidator (known elsewhere in Canada as the executor), is the person appointed by the deceased to administer their succession (known elsewhere in Canada as the estate) and ensure their last wishes are carried out. The liquidator must consult the will, make an inventory of the deceased’s assets and debts, pay their creditors and taxes, and remit their property to the rightful owners. If the deceased did not designate a liquidator, these tasks fall to the heirs. Contrary to what one might think, home and auto insurance policies are not automatically cancelled when the insured dies because their vehicle and home still need to be covered.
When a loved one dies, should you cancel their auto insurance?
If the deceased owned a vehicle, it is possible to cancel their auto insurance at any time by sending a notice of cancellation to the insurer. But it’s best not to rush into cancelling the policy. Instead, you can call the insurer and have the policy transferred to the succession. To do so, the insurer will require supporting documents (e.g., death certificate, notarized declaration of heirship, etc.). As required by law, the vehicle must be insured until the succession is settled even if it’s not in use. Subsequent insurers could refuse to insure the vehicle if it is left uninsured too long. Don’t forget that the liquidator or heirs must continue to pay the insurance premium.
If you are settling a loved one’s succession, you should also notify Société de l’assurance automobile du Québec of their death, cancel their driver’s licence, and transfer ownership of their vehicle to the person named in their will or the buyer, if you have one. If you decide to cancel the deceased’s auto insurance policy, make sure the insurer receives the notice of cancellation. The insurance policy will end only once the notice is received.
Home insurance: The succession’s responsibilities
The liquidator or heirs must ensure the deceased’s residence remains in good condition while the succession is being settled. The first thing to do is notify the deceased’s insurer, who will issue a vacancy permit intended specifically for unoccupied homes. The insurer will require a supporting document (e.g., death certificate, notarized declaration of heirship, etc.) and will put the policy in the name of the succession. If there is a mortgage on the property, the insurer will automatically notify the lender.
While the succession is being settled, it’s best to protect the deceased’s residence by visiting it regularly, heating it minimally to prevent water damage, and doing exterior maintenance. The liquidator or heirs must continue paying the deceased’s insurance premium in order for coverage to continue. Like auto insurance, home insurance policies may be cancelled at any time with a notice of cancellation.
Life insurance: What are the deadlines?
Insurers are required to pay out the benefits indicated in their policies within 30 days of receipt of the requested supporting documents (death certificate, notarized declaration of heirship, ID from the beneficiary or beneficiaries, insured’s birth certificate, etc.). Providing these documents at the beginning of the process will help ensure the life insurance claim is settled smoothly. The insurance policy ends at the time of death so any premium overpayments will also be refunded to the succession.
Travel insurance: What to do if your travel companion dies?
Use the phone number on your travel companion’s insurance policy to call their 24/7 helpline. The travel insurer can also assist you if you are tasked with taking care of the deceased’s body. The insurer will also cover costs directly related to the preparation and return of the remains or burial or cremation on site. That’s why it’s always a good idea to give your travelling companion a copy of your travel insurance policy.
Good to know!
Usually when you file a personal insurance claim in connection with a death or accident that causes the loss of use of a limb (e.g., loss of a leg), you don’t need to declare all the insurance policies held by the injured or deceased person. It is possible to receive the insurance benefits from several policies in one go.