Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Aug 20, 2021

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auto insurance

You’ve already decided to purchase uninsured motorist, roadside assistance, rental car insurance, and personal injury protection or med pay coverage…so why not go for auto death indemnity too, right?

The options for additional coverage on an auto insurance policy are seemingly endless.

Sometimes overwhelming. Where exactly do you draw the line? When is enough, enough?

What Is auto death indemnity coverage?

“Auto death indemnity” is a no-fault auto insurance coverage that offers a death benefit to you or the passengers of your vehicle in the worst case scenario.

This means the insurer will pay for the costs of a funeral for you or your passengers, regardless of whether you caused the accident or were a victim of someone else’s negligence.

Keep in mind that statistics dictate that the average funeral costs as much as $5,000 per person nowadays, and is only rising.

It’s no fun to discuss any of this, but the facts are the facts, and regardless of your emotional state in the event of an untimely death, you will get no financial breaks when the worst occurs.

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How much will the insurer pay?

The good news is that there are options you can choose from depending on what most insurance providers offer you in terms of coverage. The insurer will pay up to the policy limit you purchased. So make sure you know what the financial limits are.

Typically, you can purchase amounts of $5,000 or $10,000.

Your insurance premium will reflect the amount of coverage you purchase.

The amount of coverage you should purchase, if any, depends on how well you are already insured, if at all.

Should you spring for auto death indemnity?

Shocker alert! The answer depends on a few different factors.

If you have other types of insurance you may not need to bother. Here are some other coverage types that may offer similar, overlapping benefits.

Personal Injury Protection (PIP) – A good insurance agent would have explained this fact to you. PIP normally offers a death benefit up to the coverage amount that you have for the person who has been injured. This is the type of coverage you want included in your policy if you want coverage for the individuals in the car at the time of the accident. PIP is associated with medical bills rather than the damage done to the vehicle.

Health Insurance – many health insurance policies include coverage for funeral expenses as well. A funeral can unfortunately be an expensive service, so having some financial assistance with setting one up can be a boon.

Medical/Disability – Again, death benefits may be included on these policies as well. Check with your provider to see what types of coverage you have included in your policy.

Be sure to scour the paperwork of existing policies to see if you’re already covered before paying for even more coverage you may not need.

Auto death indemnity: should you have it?

We at TTAI think that having insurance ends up being helpful no matter what the situation, but we also understand that there are types of coverage out there for everyone, and that you only go with what fits into your personal life.

If you don’t have any other insurance coverage with this sort of benefit, auto death indemnity could be worth looking into. You can also look to see if it can be a part of an umbrella policy if you require a wide range of protection.

However, if you are the type who purchases a liability-only (stay legal) auto insurance policy, the odds of you wanting to cough up more money are pretty slim.

Note: There are insurance agents out there who will push this coverage on you…while also selling you PIP. If an agent tries to “oversell” you coverage, simply find another agent.