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If paid in advance (as most insurance policies are) the insurance is good until the day it expires whether the purchaser is still alive or not. The bigger question is; does his sister have the legal right to use the deceased's vehicle? Unless she is a co-owner of the vehicle it becomes the property of the deceased's estate and falls under the control of the Executor of the estate.

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Q: If my father died can his sister drive his vehicle under his insurance?
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