Insured/policyholder dies - what to do?

[darnovak]

Through a reliable source you learn one of your New York insureds/policyholders has passed away. What due diligence and documentation does your agency initiate to prevent an E&O situation? Any specific suggestions or experiences regarding vacancy, unoccupancy, household, notifying the carrier, non-pay notices pending, etc. Do you require documentation from the administrator or executor (or those claiming to be...)? Do you immediately notify the carrier? We are developing an agency procedure guide and would like items for consideration - specific and generic. Thank you.

[Phils]

I can only mention what we do:

Nothing. Until we hear from someone authorized to make changes or cancel the policy.

We only feel it would be wrong to immediately start having policies cancel because we "saw" an obit in the paper. Families are dealing with enough because of the death.

I'm not saying that's the legally correct procedure, only that we do not want to add to a grieving family's problems.

Phil

[mccluney]

My Goodness

I would call and offer my condolence and indicate to the extent possible what policies I had and offer to discuss at a time appropriate what help our office could provide through the loss encountered. I am certain the conversation who lead me to the next steps I would take to help the business or family.

[NYagent301]

I wouldn't know if there is a "legally correct" procedure. Most personal policies revert insurable interest at the time of the named insured's death to their legal representative automatically. I would subscribe to Phils as in "do nothing". At least that is the most consistent way to deal with it. I agree there may be issues with vacancy on a property policy, but again certiain exclusions and limitation trigger automatically but core coverage still does exist. At the time the agent is contacted is when all options are explained. If in your example it is a close associate, friend of the family, someone you "know" of course then it is a natural conversation to have with their family, but pick the right time to do it. In regard to protecting E&O, once there is an event (i.e. contact from a family member, returned mail etc.) action steps must be taken to notify the executor and carrier.

[darnovak]

Thanks for the input. From any state is OK. As far as E&O goes, I have come to the conclusion that being proactive is far better than being reactive. When we receive 'word' and/or have confirmation that a policyholder has died (not necessarily from a legal representative) we immediately send a letter and document our system. This places the ball in the court of the responsible party/ies. I call this 'due diligence'. We do this for every death situation - consistency of such 'due diligence' might be a defense if there is an E&O brought against us for failing to do something. Isn't the obituary in a newspaper a 'legal advertisement' nowadays? Now let me ask the 'wait and see' agents this question: When you receive a piece of mail you sent to an insured returned by the USPS, do you hold it forever waiting for only the first named insured to notify you of their change of address? After all, what is the USPS other than juat trhe post office, right? They are not the first named insured or his/he/their legal representative so we can ignore returned mail until the first named insured contacts us right? My agency immediately goes 'proactive' and sends one inquiry by mail to the new address indicated by the USPS (if shown on their return label) and we make every effort (including but not limited to email and telephone) to contact the insured and determnine if they have moved or not. Don't you? In the event of a named insured's death, the legal representative of the deceased may not be able to locate any of the deceased's policies. Do you wait weeks or months until the policies might be located and somebody might contact your agency and ask about them? This could be after they are all cancelled for non-pay. Don't think that can happen? Guess again - it has happened and it will happen if you are not proactive in these situations. These two agency procedures are in our agency procedures guide, are followed consistently, and are documented fully. Please keep sending your comments and suggestions folks. Thank you.

[SFOInsuranceLady]

We are usually very proactive in our agnecy as well, however, after thinking about this situation for a bit, I am going to play devil's advocate and open up a can of worms here.

What if the "deceased" is not deceased and is very much alive? Either missing, dead and no body recovered or perhaps trying to flee an abusive relationship by faking his/her death and going underground (no, I don't watch too many movies).
This IS a possibility. Let's say you see an obit or memorial notice in the paper. They are not legal notices as publishing an obit in the newspaper is strictly volunatary and not required. Well, at least in California, this is true. The only legal notice would be a death certificate signed by a doctor or a court order declaring one deceased. By removing a named insured from a policy, etc..you are taking a risk that you necessarily shouldn't. I would simply let the carrier know that I saw the obit in the paper, however, let the company know that you don't have any official notification of the death. This way, it gets you off the hook. Changes to the policy should only be authorized by the named insured oor his or her LEGAL representative (Power of Attorney, Executor/Executrix, Tustee, etc.).

By all means, follow-up with a letter to the "deceased's" residence, certified mail. All property goes into probate and someone will have to start picking up mail at the residence eventually.

Just my 2 cents worth!

[FFA]

Call the next of kin. Tell them what policies you have on the deceased. Let them know you are the point of contact.

[SFOInsuranceLady]

[Call the next of kin. Tell them what policies you have on the deceased. Let them know you are the point of contact.]


Not sure if this is something you can do because of privacy laws.

[Brenda H]

Well, my 2 cents, from having worked in a very SMALL town, where the newspaper came out once a week, was that we did "cruise" the obits for information that we might need about our insureds. And having been through this, insurance is the last thing that you would think of, unless it is life insurance, I suppose.

We always just followed up with a condolence call or letter or both, expressing our condolences and be sure to let us know if we could help in any way, as we have been the deceased insurance agent for x number of years. That way, whomever needs it has someone to contact when they do start into the process of sorting through things. Seemed to work well for us in a small town, and would probably work in a larger setting to, since we are in a relationship business.

[FFA]

[Call the next of kin. Tell them what policies you have on the deceased. Let them know you are the point of contact.]


Not sure if this is something you can do because of privacy laws.

Point being, let someone know you would be the point of contact.

[wemayo]

In response to the original post, this appears to be more of a question of business practice as opposed to E&O concerns.
From reading the thread it also appears that most of the responses are coming from an agency side and not a carriers.
Being on the carrier side I would strongly suggest that any potential death is followed up on immediately. This is not to prevent sensativity, but to assist the policyholder in the best way.
In the event of a claim to the carrier, if the policy has not been updated there will be a delay in any payments to the insured or representative. Therefore the intent of not acting, in order to avoid conflict with the family members, will hurt them once a claim is filed.