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With car insurance, accidental death benefits (ADB) coverage pays a modest death benefit in the event of a fatal car accident. Even with its low payout, it can take some financial pressure off your family — and many companies offer it as a free perk included with your policy. This coverage is sometimes called automobile death indemnity coverage.
What does a car insurance death benefit cover?
Depending on the state you live in, ADBs can be a lump sum payment for:
Funeral and burial expenses
Medical bills incurred before death
Loss of wages up until the day of death
Should I look for car insurance with death benefits?
Accidental death benefits coverage can keep your loved ones from paying out of pocket for end-of-life expenses. For reference, the average funeral costs over $6,700. However, adding this car insurance coverage works best if you don’t qualify for life insurance, need a cheaper life insurance option or can find it as a free perk.
How to claim the death payout after a car accident
The steps to make an accidental death benefit claim will vary by insurance company, but this is the general process.
Contact your insurance agent. As soon as possible after an accident, call your insurance provider even if there isn’t a fatality.
File the claim. Keep in mind, these policy riders tend to have a time limit. For example, if the injured doesn’t die within 90 days of the accident, then the coverage can be denied.
Provide documentation. You’ll probably need to send copies of the police report and death certificate to the insurance provider. The insurance company may also require a post-mortem exam before they agree to pay the benefit.
Prove your relationship to the deceased. Death benefits are typically paid to the spouse of the deceased, or to the parents in the death of a minor. Depending on the policy, the benefits may also be paid to the deceased’s estate.
Receive payment. You will either receive your payout as a check or direct deposit within the timeframe stipulated in the policy.
Reasons that car insurance won’t pay the death benefit
Certain circumstances may cause an accident to be excluded from coverage. Some common exclusions to this coverage include:
Suicide. This coverage only includes accidental death. If suicide is suspected, the insurance company might require an investigation — potentially including a post-mortem exam — to prove they have to pay.
Crime. If the accident happens as the result of criminal activity, the benefit won’t be paid.
Dangerous activities and hobbies. If the accident occurs during a dangerous activity or hobby, such as illegal street racing, it will be excluded from coverage.
Occupational accident. If the fatal accident happens while on the job, it may be excluded. Exceptions to this exclusion may include taxi drivers and other professional drivers, depending on the policy and the state where you live.
Prior disease or injury. If the death occurs because of an existing condition that’s not related to the car accident, your insurance won’t pay out.
Compare car insurance with death benefits
This coverage is usually offered as a free perk or add-on to your existing insurance policy. Compare the overall costs and benefits of companies with death benefits and choose Get quotes to see your customized rate.
Bottom line
Accidental death benefit coverage can offer real peace of mind to road warriors and other drivers who spend a lot of time in their cars. But it’s important to make sure you’re not duplicating coverage that already exists in your insurance policy.
Heather Petty is a personal finance writer at Finder, specializing in home and personal loans. After falling victim to a disreputable mortgage broker when buying her first home, she’s on a mission to help readers avoid similar experiences when managing their own finances. A self-proclaimed word nerd, her writing and analysis has been featured on MSN, Credit.com and MediaFeed, among other top media. Heather previously worked as a technical writer and editor for the casino systems industry and is an internationally published young adult mystery author. She earned a BA in English with a minor in journalism from the University of Nevada, Reno.
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