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

According to statistics, in 2019, there were more than 6 million passenger car accidents in the US. Unfortunately, the number of fatalities due to these car accidents has been on the rise. In 2010, there were roughly 32,000 deaths due to car accidents. A decade later, the number is almost touching 40,000. While cars are getting safer, the number of accidents and deaths are going up. This makes getting a personal injury protection plan or Medicare very crucial.

It is very important to get an auto insurance policy that covers the expenses of medical treatments as well as death. Almost all the major players in the auto insurance segment offer personal injury protection plans with very similar coverage. This article will describe in detail everything you need to know about the coverage and expected payout of auto insurance in the case of a car accident death. 

Which Insurance Policy Covers Death in Car Accidents? 

Collision insurance coverage and comprehensive coverage do not cover any medical expenses and death. Similarly, your liability insurance coverage (which is mandatory in almost every state in the US) will not cover your medical expenses, but the other person who gets injured in an accident is your fault. If you get in an accident that is someone else’s fault, then you can claim their liability insurance policy. 

Some auto insurance policies will cover your medical expenses and deaths in a car accident; the Personal Injury Protection plan, Medicare (your medical insurance), and Uninsured Motorist Coverage. Let’s look at the policies briefly. 

Personal Injury Protection Plan

The most popular insurance to cover the expenses of medical treatments and death is a personal injury protection plan. Almost every company offers PIP insurance policies, but it is better to compare different PIP policies and get the lowest average rates and save some money. 

There are 12 states in the US where having a personal injury protection plan is mandatory. These states are called “no-fault” states as it does not matter whose fault the accident is, each individual must carry their injury protection plan. 

Personal injury protection coverage can vary from one state to another and from one company to another, but generally, this policy covers the expenses of medical treatments, and death, which includes the cost of a funeral and other related expenses. PIP also will compensate for any lost wages due to the accident. 

The coverage amount after the death will go to the person mentioned in the policy by the policyholder. This is usually a family member like a parent, spouse, etc. Most insurance companies stipulate that the nominee should be related and/or be a family member. The people to whom you want to cover the amount to go should be mentioned on the declaration page. 

Medicare or other medical insurance also covers the expenses of treatments due to road accidents and even funeral expenses. PIP and medical insurance are very similar, so much like that in many states both these policies are merged into one. If you have medical insurance, you might not need a personal injury protection plan (if you don’t live in a no-fault state). Contact your medical insurance company to get the details.

The only general difference between a personal injury protection plan and medical insurance is that many medical insurance policies do not cover the cost of lost wages. If due to an accident you are unable to work, or some expenses are directly due to the accident, your injury protection plan will pay for the costs incurred.

Liability Insurance Coverage

If the death was due to an accident by someone else, then the family members (or anyone concerned with the victim) can claim the liability insurance policy of the driver at fault. Liability coverage has a specified coverage limit for both bodily injury and property damage. So the maximum amount you can get in case of an accident will depend on the coverage limit of the driver at fault. 

There are many instances when the liability coverage of the driver at fault is not enough to cover the medical costs or funeral. This is why having an uninsured motorist/underinsured motorist coverage is very important. Here’s how it works and what it covers.

Underinsured/Uninsured Motorist Coverage

Underinsured/uninsured motorist coverage pays for any amount that is lacking from the liability coverage of the driver at fault. Let’s say that you have the UM/UIM policy with a specific limit, say $20,000. In case of an accident, if the liability insurance is short of $10,000, you can claim your UM/UIM policy and get the coverage. 

This is just not useful when the driver at fault is either lacking a liability insurance policy or does not have one at all. In many cases, having a personal injury protection plan and uninsured motorist coverage can save you a lot of money in a hit-and-run case. UM/UIM insurance policies are very affordable and you can get a good coverage limit at a lower price. 

Disclaimer

In case of death due to a car accident, there are a few things you need to know about the coverage. The first thing is, that insurance policies might not pay if the cause of death was not the car accident, but the accident was just a part of some other accident. A common example is drunk driving, which will not be covered under any insurance payouts. The company will perform an autopsy to make sure the death was directly due to the car accident before paying the insurance amount. 

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